A Simplified Employee Pension (SEP) Plan is a retirement plan that you, as an employer, can establish, even if you have no employees.
Offering a retirement plan can make it easier for you to attract and retain valuable employees.
Easy to set up – no complicated forms to fill out
Tax-deductible contributions up to 25% of compensation, as much as $44,000 for the 2006 plan year†
Earnings grow tax-deferred until withdrawn
No annual reports for you to file with the IRS
Contribution percentage can vary each year
Since you may be in a lower tax bracket after you retire, your SEP withdrawals could be taxed at a lower rate than you pay now
† The maximum compensation on which contributions can be based is $220,000 for the 2006 plan year. For self-employed individuals, compensation means earned income.
