Retirement Benefits for the Small Business 
SIMPLE IRA: As a result of the Taxpayer Relief Act of 1997, a new type of employer-sponsored retirement plan was introduced. The SIMPLE plan provides for employee salary deferrals of up to $7,000 (PRE-TAX) and employer matching of up to 3% of the participants' salaries (TAX DEDUCTIBLE).

Following is an outline of the characteristics of the SIMPLE IRA:

WHO CAN SPONSOR A SIMPLE IRA PLAN? Self-Employed individuals, Corporations, Partnerships, Exempt Organizations and LLC's are eligible to set up SIMPLE plans;

WHO IS ELIGIBLE TO PARTICIPATE? Employers can set up their own eligibility requirements provided that the length of employment requirement does not exceed 3 years and minimum annual salary requirement does not exceed $5,000;

HOW MUCH IN PRE-TAX WAGES CAN BE DEFERRED? 100% of the salary of an eligible employee up to a maximum of $7,000 per calendar year;

HOW MUCH CAN BE MATCHED BY EMPLOYER? Employer matching is allowed either dollar-for-dollar or on a "non-elective" basis up to a maximum of $7,000 per year or 3% of employee's annual salary whichever is smaller.

WHAT ARE THE TAX ADVANTAGES? Employees' contributions are tax-deferred, Employer contributions are tax-deductible.

REMEMBER THIS: The deadline for sponsoring a SIMPLE plan is October 1st.


We can now help you set up retirement savings vehicles such as the SIMPLE IRA plan. Call us today for additional details at (310)444-3041