Thinking about a 2023 SEP IRA Contribution? Here Are 6 Rules You Need to Know
Are you thinking about making a Simplified Employee Pension (SEP) IRA plan contribution for 2023? If so, here are 6 rules you need to know.
SEP IRA contribution
Big Increase in Many 2023 Retirement Plan Contribution Limits
The IRS has announced the retirement contribution limits for 2023. Because many of these limits are tied to inflation, it shouldn’t come as a surprise that some of the limits had a big jump. Here’s a summary:
60-Day Rollovers & SEP IRA Contributions: Today’s Slott Report Mailbag
Question:
A new customer came to me asking for help with an IRA. Unfortunately, he had already accepted a check from the 401(k) plan made out to him personally. He sat on the check for 5 months and deposited it into his checking account last week. He is only 50 years old. Since we are well after the normal 60-day rollover period, is there any way that this can be repaired? Perhaps under the CARES act of 2020 if his departure was Covid related?
Any direction you can provide would be appreciated.
Inherited IRAs and SEP IRA Contributions: Today’s Slott Report Mailbag
Question:
We had a client who died with no beneficiaries on his $500k 401(k). He wasn’t married and only 45 years old. His parents are disclaiming rights to the inheritance, so it’s going to his siblings. Is there any way these two siblings can stretch the retirement account into an inherited IRA? If so, what does that look like?
Thanks,
Patrick
Answer:
Hi Patrick,
The siblings may still be able to use the stretch even after the SECURE Act eliminated it for most beneficiaries.
Can I Still Receive SEP Contributions If I Have to Take RMDs From It?
In this week's Slott Report Mailbag, we examine SEP IRAs (just like we did yesterday when outlining a major mistake to avoid), their yearly contribution deadlines and how they interact with required minimum distributions (RMDs).
Avoid This Common SEP IRA Mistake
A Simplified Employee Pension (SEP) is an employer sponsored retirement plan where contributions are made to employees’ IRAs. Don’t be fooled by the name! Although these plans are in fact designed to be “simplified” or less complex than other types of retirement plans, there are ways to go wrong and make errors. A seemingly small mistake with a SEP IRA plan can cause big problems.
The 2 Parts of a SEP IRA: You Can’t Have One Without the Other
An issue we recently discussed with a financial advisor highlighted the rule that there are two separate parts to a SEP (Simplified Employee Pension) plan. If both parts of the SEP are not executed, then severe tax consequences can result to both the employer and any eligible employees. We detail the two parts of a SEP IRA below.
Own a Business? Consider a SEP IRA For 2013
If you own a business and currently don’t have a company retirement plan, consider opening a SEP (Simplified Employee Pension) for 2013 (that's not a misprint in dates). A SEP is a relatively uncomplicated employer retirement plan that uses an IRA as its funding vehicle. Click to find out why business owners should consider a SEP IRA for 2013.
You Don’t Have to Keep Your SEP IRA Funds in a SEParate IRA
A SEP, or Simplified Employee Pension Plan, is an IRA-based employer retirement plan that’s very similar to a profit sharing plan. All SEP contributions are made by your employer. The employer decides how much to contribute for the year, anywhere from 0% to 25% of an eligible employee’s compensation with a maximum of $51,000 for 2013. After your employer decides how much to contribute, that contribution will be deposited into your IRA. Note that SEP contributions can never be made into your Roth IRA or your SIMPLE IRA.
Funding a SEP IRA
If your employer offers a SEP (Simplified Employee Pension) plan, it's very similar to a profit sharing plan, except that contributions are placed into your designated SEP IRA. Once the funds are in your IRA, you own and control your own money. Your employer does not control the money after it's been deposited in your SEP IRA.
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