Retirement

If you withdraw money from a SIMPLE IRA in the first 2 years, you will be subject to a 25% withdrawal penalty.
This is 15% higher than a traditional IRA premature distribution penalty.

A Roth IRA is a special nondectible IRA. Even though you contribute to the account with your after-tax dollars, all withdrawals are tax free if you meet the following conditions: you are at least 59 and a half and an account has been in existence for at least five years. In other words, you will never pay any taxes on earnings that your IRA fund will generate after turning 59 and a half. There are no mandatory minimum distributions at age 70 and a half, as in the case of a traditional IRA plan. This feature allows passing on more savings to your beneficiaries if you wish to do so. You can withdraw money from your Roth IRA at any time without paying taxes up to the amount of your contributions. Dipping into the earnings will have no tax consequences. There is no age limit on contributions. Every person with earned income, within limits established by the IRS (in general, your modified adjusted gross income must be less than $112,000, The phase-out range is $112,000 to $127,000 for married couples filing jointly and from $173,000 to $183,000 for non MFJ taxpayers except MFS which is $ between $0 and $10.000), is eligible to open a Roth IRA. For this purpose, the IRS considers as earned income wages, salaries and money made from being self-employed. Other income is considered passive (dividends, interest, rental properties etc.) and can not be used to fund a Roth Individual Retirement Account.

Some advantages of a SEP Simplified Employee Pension Plan are: Contributions to a SEP are tax deductible and your business pays no taxes on the earnings on the investments. You are not locked into making contributions every year. In fact, you decide each year whether, and how much, to contribute to your employees’ SEP-IRAs. Generally, you do not have to file any documents with the government. Sole proprietors, partnerships, and corporations, including S corporations, can set up SEPs. You may be eligible for a tax credit of up to $500 per year for each of the first 3 years for the cost of starting the plan. Administrative costs are low.

A Roth IRA is a special non-deductible IRA. Even though you contribute to the account with your after-tax dollars, all withdrawals are tax free if you meet the following conditions: you are at least 59 and a half and an account has been in existence for at least five years.
In other words, you will never pay any taxes on earnings that your IRA fund will generate after turning 59 and a half. There are no mandatory minimum distributions at age 70 and a half, as in the case of a traditional IRA plan.
This feature allows passing on more savings to your beneficiaries if you wish to do so. You can withdraw money from your Roth IRA at any time without paying taxes up to the amount of your contributions. Dipping into the earnings will have no tax consequences.
There is no age limit on contributions. Every person with earned income, within limits established by the IRS (in general, your modified adjusted gross income must be less than $110,000), is eligible to open a Roth IRA.
For this purpose, the IRS considers as earned income wages, salaries and money made from being self-employed. Other income is considered passive (dividends, interest, rental properties etc.) and cannot be used to fund a Roth Individual Retirement Account.

SIMPLE IRA plans must be set up by 10/1/xx for that year's contributions to be deductible on that year's tax return.

The biggest benefit for a business with a Simple IRA plan is that it provides a very easy way to provide an employee retirement option without all the technical complications of 401Ks and similar account plans. Second, the establishment and maintenance costs to run a Simple IRA plan are a big plus for the cost-conscious business. Additional benefits include No special plan-level tax reporting is required for the employer annually. No discrimination testing is necessary. There is no requirement on the employer to track vesting. All contributions are immediately 100% vested (at the point of deposit the employee owns the full amount in the retirement account without any time delay).

If you withdraw money from a SIMPLE IRA in the first 2 years, you will be subject to a 25% withdrawal penalty. This is 15% higher than a traditional IRA premature distribution penalty.

Yes. www.rothira.com

Yes. www.rothira.com