Simple ira

[nwtaxlady]

What does it take for a Self Employed person to set up a Simple plan? Besides going to the investment firm say (Edward Jones or who may it be), is there a deadline to have it set up by? Anything else? Client is interested in what all is involved. What required paper work is there to file for this SCH C ?

Thanks

[Lion]

TTB has a great section on SIMPLE IRAs 13-17 to 13-19 to start. Employer/self-employed can set it up anytime through 1 October.

[kathyc2]

With no employees it's a simple process. I believe it can be set up fairly easily on sites such as Fidelity. If there are employees it's a little more complex such as keeping documentation that it is offered to all eligible employees. I personally will recommend client use an investment advisor unless client is somewhat sophisticated on investments.

[John of PA]

Simple IRA's

Remember there are 2 types of contributions to the Simple IRA. The employer contribution of 3% of everyone's salary (that is everyone who is in the plan) and each employees contribution (that is withheld from their paycheck, or a straight owners contribution). The Plan must be set up before year end. This plan allows Sch C businesses with low profit, say 15,000, to contribution and deduct close to 100% of the years profit (unlike SEP plans where the contribution is limited to 20% of the profit). Hope this helps.