October 5, 2018
Establishing Small Business
|Arrange Characteristics||SEP IRA||EASY IRA||Profit Sharing Plan||401(k) Plan|
|Obligation for Making Efforts||Efforts were created because of the manager.||Contributions are formulated by company and employees.||Workers usually make contributions; however, the boss could also make efforts.|
|Contribution Freedom||Efforts are discretionary.||Employer contributions are necessary.||Contributions usually are discretionary.||Employer matching efforts, if elected beneath the program, are often necessary whenever staff members make salary deferral contributions. Profit-sharing contributions are often discretionary.|
|Qualified Companies||Any company may establish.||Any company with 100 (or less) workers whom attained $5, 000 or more through the previous year.|
|Participant Eligibility||May exclude workers who're under age 21, have worked under three-out associated with the five preceding years, and/or people that have payment significantly less than $550 for year.||Needs to be made available to staff members which attained at the very least $5, 000 in just about any two preceding many years and are also sensibly expected to make $5, 000 in the present 12 months.||May exclude workers who possess perhaps not accrued two years of solution. But if service eligibility is more than one-year, 100percent vesting will take place after two years.||May exclude workers who have maybe not accrued twelve months of service.|
|Vesting||Contributions are instantly 100per cent vested.||Contributions might put through a vesting routine.||Salary-deferral contributions tend to be straight away 100percent vested.
Company efforts might subjected to a vesting schedule.
|Financial Loans||Financial loans cannot be allowed.||Loans can be permitted.|
|Age Limitations||May exclude employees under age 21.||No age constraints.|
|Contribution Limit||Companies may contribute on behalf of each eligible staff member around 25per cent of their settlement or $51, 000, whichever is less.||Staff members may defer up to 100% of their payment to the annotated following:
$12, 000 for 2013
Workers age 50 and older can make catch-up efforts of this following:
$2, 500 for 2013
The employer may contribute 2% of payment to each eligible worker, or make a matching share for every employee whom makes a deferral share. The matching limit is dollar-for-dollar as much as 3per cent associated with staff member\'s settlement.
|Employers may contribute as much as 25percent of payment compensated to qualified employees. An employee\'s complete efforts cannot go beyond $51, 000.||Workers may defer 100percent of payment up to the immediate following:
$17, 500 for 2013
Staff members age 50 and older are able to make catch-up contributions regarding the following:
$5, 500 for 2013
Companies may add to 25% of payment compensated to qualified employees.
Aggregate share for every single worker cannot meet or exceed $51, 000 + catch-up efforts.
|Deadline wherein Arrange Must Be Founded||Company\'s tax-filing due date, including extensions.||October 1 of the 12 months which is why the master plan has been set up.||The past day of the boss\'s program year.|
|Circulation Principles||Distributions are made at any time, but are susceptible to national taxation and early-distribution penalty if the worker is under age 59.5 whenever circulation does occur.||Distributions could be made anytime, but is put through federal taxation and early-distribution penalty if staff member is under age 59.5 whenever distribution takes place.||Distributions may only be made when certain needs, as stated underneath the program, are satisfied. Distributions might afflicted by federal tax and early-distribution punishment if staff member is under age 59.5 when circulation does occur.||Distributions may be made only once particular demands, as mentioned beneath the program, are met. Distributions might be afflicted by federal taxation and early-distribution penalty if worker is under age 59.5 whenever circulation takes place.|
|Complexity||Low. Minimum administration needed.||Medium. Is expected to register annual IRS comes back. May require the help of a third-party administrator to make certain plan is within conformity.|
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