A SEP IRA may be an ideal retirement plan for small business due to the ease in which it can be established and maintained.
All SEP employer contributions go directly into a Traditional IRA established in the name of each employee.
The employer determines, on an annual basis, the amount to be contributed for all eligible employers, ranging from 0 to 25% of compensation, subject to an annual cap.
Among the benefits of a SEP IRA:
- Tax - deductible employer contributions
- Tax - deferred earnings for employees
- No oversight of plan assets by employers