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You may be required to file IRS Form 5500 annually.As a result of the 2006 Pension Protection Act, for plan years after 2006, one-participant plans with total plan assets of 0,000 or less are exempt from filing Form 5500-EZ.A 401(k) will be far more flexible than either a SEP or SIMPLE IRA, allowing you to customize your plan to meet the needs of your business.
The owner is responsible for the administrative, compliance and reporting duties related to the plan.
Withdrawals of designated Roth contributions are tax-free provided they are considered a qualified distribution where the account is held for at least five years and in the event of a participant's attainment of age 59½, death or disability.
They’re also great for diversifying tax savings strategies, which is one of the many ways a 401(k) can be designed with unique business needs in mind.
If you’re looking to maximize your tax benefits and take advantage of higher contribution limits ($56,000, or $62,000 for those 50 and older) than a typical IRA ($6,000, or $7,000 for those 50 and older), a 401(k) will allow you to take advantage of many savings features.
Annual fee is waived for account balances of $50,000 or more. Please consult your tax advisor about your particular situation. Generally, you may borrow up to one-half of your vested account balance, but no more than $50,000.
Businesses with no employees other than the owners and their spouses. Distributions are limited to the terms of the plan. Minimum distributions are required for owners 70½ or older.Businesses with SIMPLE IRAs do not have vesting schedules for their employees, and aren’t required to report taxes at the plan level—but they are required to make employee contributions.If you’re looking for an easy-to-run, relatively low-maintenance retirement plan that allows your employees to contribute to their retirement, a SIMPLE IRA might be right for you—particularly if you have a loyal employee base with low turnover.Plus, you’ll be helping your employees save for their retirement—a benefit that many sought-after workers will appreciate.Retirement plans for small businesses can be easy to administer and maintain.Your small business—or anyone with freelance income—can open a SEP IRA.They’re easy and have high contribution limits, and it can be used as a competitive recruiting advantage.SIMPLE IRAs have similar benefits to a SEP IRA, with one key difference: Employees can contribute to them.This makes it appealing to employees looking to contribute their own money, and business owners who don’t want to hire someone to run the plan or spend a lot of time dealing with government non-discrimination testing or plan design.A traditional 401(k) plan—the kind in which your employees contribute tax-deferred money to a retirement account—might be the first thing that pops into your head.But if your small business has 100 employees or fewer, there are options outside of a traditional 401(k) that may better suit the needs of your business and employees.