The SEP-IRA may be especially suitable for new businesses or companies with cyclical profit histories. It is a simplified alternative to a profit sharing plan, involving less paperwork and cost to the employer. Questions about Retirement Plans SEP-IRA Characteristics 1. A smaller company or sole proprietor seeking a flexible employer contribution plan with easy set up and administration. All types of employers, including self-employed individuals.
Contributions are discretionary from year to year and determined annually by the employer.
By tax filing deadline plus extensions. Employers can choose to be less restrictive. Taxed as ordinary income. Immediate vesting upon entry into the plan. By tax filing deadline plus extensions for the fiscal year.