Choosing a SIMPLE IRA Plan

April 1, 2021

Are you a small business owner looking for a retirement plan for you and your employees? A Savings Incentive Match Plan for Employees (SIMPLE) IRA allows participants to defer part of their salary into the plan. It also requires a contribution from the employer each year.

It's easy to get started with a SIMPLE IRA. Just complete and sign the two-page IRS Form 5304-SIMPLE or Form 5305-SIMPLE, and share the model notification and salary reduction agreement with your employees. Contributions are made to an IRA set up for each eligible employee. Key features of a SIMPLE IRA include:

  • Available to employers with 100 or fewer employees
  • Contributions are deductible and grow tax-deferred to retirement
  • No filing requirement with the IRS
  • Tax credit for starting a new plan
  • Saver's credit up to 50% for salary deferrals

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