{"id":6486,"date":"2019-09-14T16:52:54","date_gmt":"2019-09-14T16:52:54","guid":{"rendered":"http:\/\/on-line-interactivity.com\/blog\/2019\/09\/14\/for-entrepreneurs-a-simple-ira-may-be-best\/"},"modified":"2019-09-14T16:52:54","modified_gmt":"2019-09-14T16:52:54","slug":"for-entrepreneurs-a-simple-ira-may-be-best","status":"publish","type":"post","link":"https:\/\/on-line-interactivity.com\/blog\/for-entrepreneurs-a-simple-ira-may-be-best\/","title":{"rendered":"For Entrepreneurs A Simple Ira May Be Best"},"content":{"rendered":"<div style=\"margin-top: 0px; margin-bottom: 0px;\" class=\"sharethis-inline-share-buttons\" ><\/div><p><body>&#13;<\/p>\n<div align=\"center\">&#13;<\/p>\n<p><a href=\"https:\/\/on-line-interactivity.com\">&#13;<br \/>\n  <img loading=\"lazy\" decoding=\"async\" border=\"0\" src=\"https:\/\/on-line-interactivity.com\/blog\/wp-content\/uploads\/2019\/12\/abbtop.jpg\" width=\"800\" height=\"120\"\/><\/a><br \/><a 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class=\"style7\">&#13;<br \/>\n                <font color=\"#FB7014\" size=\"4\" face=\"Tahoma\">For Entrepreneurs A Simple IRA May Be Best<\/font><\/span><\/div>\n<\/td>\n<p>&#13;<br \/>\n            <\/tr>\n<tr>\n<td align=\"left\" height=\"19\">\n<div align=\"justify\"><span class=\"style2\">by: &#13;<br \/>\n                <font size=\"3\" face=\"Times New Roman\" color=\"#FB7014\">Tim Knox<\/font><\/span><\/div>\n<\/td>\n<p>&#13;<br \/>\n            <\/tr>\n<tr>\n<td align=\"left\" height=\"12\"><span class=\"style2\">Q: I own a small decorating business and I\u0092ll be the first to admit that I don\u0092t know anything about taxes or retirement plans. I\u0092d like to set up a 401(k) or an IRA or some other kind of retirement plan for me and my three employees. What are the various retirement plan options available for a small business owner and in your opinion, which would work best for me?&#13;<br \/>&#8212; Wanda S.&#13;<\/p>\n<p>A: Wanda, I appreciate your confidence in my humble opinion, but asking me for financial advice is like asking Donald Trump for a recommendation on hair care products. I can tell you what works best for me and my business, but you\u0092ll need to do your homework and seek professional advice to figure out what would work best for you. As a side note, I hear that Donald Trump is coming out with his own line of hair care product soon to be called \u0093Big Head.\u0094 The formula is 1ousse, 1iquid nails, and 98ot air. It should be a big seller among the high brow, comb-over crowd.&#13;<\/p>\n<p>Here\u0092s my best advice on retirement plans: find yourself a financial advisor (or financial planner) who is has experience working with small businesses and have him or her explain the options available and make a recommendation as to the type of plan best suited for you and your business. When I say \u0093financial advisor\u0094 I\u0092m not talking about your know-it-all brother-in-law or your accountant. I\u0092m talking about a broker or financial planner (or other licensed professional) who has a proven track record of making his clients money and is an expert on IRAs, 401(k)s, mutual funds, etc.&#13;<\/p>\n<p>The best way to find a good financial advisor is to ask for referrals from your most successful friends and associates. Find the richest, stingiest man in town and ask who his advisor is. Meet with several advisors, explain your situation, and ask for their recommendations. You should also make sure the advisor is a good fit for your personality and your business. If all goes well you will be doing business with this person for many years to come, so make sure the relationship feels comfortable to you and that you are confident in the advisor\u0092s ability to manage your money.&#13;<\/p>\n<p>Let me give you a quick overview of a few of the retirement plans available to small businesses so you at least have an idea of what\u0092s out there before you start your search for a good financial advisor.&#13;<\/p>\n<p>As a small business you basically have three types of retirement plans that you can take advantage of: the Self-Employed 401(k); the Simplified Employee Pension Plan or SEP IRA, and the Savings Incentive Match Plan for Employees or SIMPLE IRA. Each allows you to make pre-tax contributions to the plan, which lets you save for retirement and lessen your taxable income by the amount of the contribution. Your investments also grow tax-deferred until withdrawal.&#13;<\/p>\n<p>A Self-Employed 401(k) is an option for self-employed individuals or business owners with no employees other than a spouse. The business can be a sole proprietorship, a partnership, or a corporation, including S corps. You can make salary deferrals to this type of plan of up to $14,000 for 2005.&#13;<\/p>\n<p>Next is the Simplified Employee Pension Plan or SEP IRA. A SEP is an option if you earn a self-employed income from a full or part time business, even if you are covered by a retirement plan at your fulltime job. A SEP allows you to contribute up to 25f earned income, up to $41,000 for 2004 and $42,000 for 2005.&#13;<\/p>\n<p>My preferred type of retirement plan is the Savings Incentive Match Plan for Employees or SIMPLE IRA. The SIMPLE IRA was created to make it easier for small businesses with 100 or fewer employees to offer a tax-advantaged, company sponsored retirement plan.&#13;<\/p>\n<p>With a SIMPLE IRA you and your eligible employees may contribute up to 3f earned income (with a maximum contribution of $10,000) on a pre-tax basis to individual SIMPLE IRAs. You must deduct Social Security and Medicaid from your gross income, but you can then make your SIMPLE IRA contribution before other taxes are levied, effectively lowering your taxable income.&#13;<\/p>\n<p>As the employer you must make \u0093matching\u0094 or \u0093non-elective\u0094 contributions into your employees\u0092 SIMPLE IRA accounts. Matching contributions means that the business matches the elective deferral contributions made by employees. For example, if the employee opts to contribute 3f his salary to the plan, the employer must match the 3ontribution.&#13;<\/p>\n<p>At first you might cringe at matching your employees\u0092 contributions, but as the business owner and an employee yourself this can be great news. As an employee of your own business you can contribute up to $10,000 to your SIMPLE IRA and the business can then match your contribution dollar-for-dollar, which means that you can put up to $20,000 in tax free dollars into the plan per year. The cost of the contributions is also deductible as a business expense.&#13;<\/p>\n<p>The non-elective contribution option requires that the company contribute 2f every employee\u0092s earned income to the plan on the employee\u0092s behalf regardless of whether or not the employee contributes to the plan himself. For 2005 the maximum contribution you would be required to make is $4,200.&#13;<\/p>\n<p>Like a traditional IRA, you can withdraw money from a SIMPLE IRA at any time; however distributions within the first two years of participation are subject to higher early withdrawal penalties than traditional IRAs or Roth IRAs. Withdrawals within the first two years are subject to a 25arly withdrawal penalty. Withdrawals taken after the first two years are subject to a 10arly withdrawal penalty.&#13;<\/p>\n<p>As the employer, the advantages of a SIMPLE IRA include: company contributions to the plan are tax deductible as a business expense; plan documents are simple and easy to administer; administration costs are low; and there is no government reporting required by the employer.&#13;<\/p>\n<p>The advantages of a SIMPLE IRA for your employees include: contributions are immediately 100ested; contributions and earnings are tax-deferred until withdrawal; employees can contribute 100f earned income up to $10,000 for 2005; and employees can direct their own investments within the IRA.&#13;<\/p>\n<p>This is a complex topic and I\u0092ve just tipped the iceberg here, but hopefully this will give you enough information to get the investment ball rolling.&#13;<\/p>\n<p>Here\u0092s to your success!&#13;<\/p>\n<p>Tim Knox&#13;<\/p>\n<p>&#13;<br \/>\n About the author:<br \/>&#13;<br \/>\n &#13;<br \/>\n  Tim serves as the president and CEO of three successful technology companies and is the founder of DropshipWholesale.net, an online organization dedicated to the success of online and eBay entrepreneurs. Related Links: <a href=\"http:\/\/www.prosperityandprofits.com\" target=\"_blank\" class=\"navigation\" rel=\"noopener noreferrer\">http:\/\/www.prosperityandprofits.com<\/a><a href=\"http:\/\/www.smallbusinessqa.com\" target=\"_blank\" class=\"navigation\" rel=\"noopener noreferrer\">http:\/\/www.smallbusinessqa.com<\/a><a href=\"http:\/\/www.dropshipwholesale.net\" target=\"_blank\" class=\"navigation\" rel=\"noopener noreferrer\">http:\/\/www.dropshipwholesale.net<\/a><a href=\"http:\/\/www.30dayblueprint.com\" target=\"_blank\" class=\"navigation\" rel=\"noopener noreferrer\">http:\/\/www.30dayblueprint.com<\/a><\/p>\n<p><font size=\"-2\">Circulated by <a href=\"http:\/\/www.geekzonehosting.com\">GeekZoneHosting.Com &#8211; Register a domain name and get hosting for your own Adsense Website just like this one<\/a><\/font>&#13;<\/p>\n<hr size=\"-1\"\/><\/span><\/td>\n<p>&#13;<br \/>\n            <\/tr>\n<\/table>\n<\/div>\n<p align=\"left\">\u00a0        <\/p>\n<p>&#13;\n      <\/td>\n<p>&#13;<br \/>\n    <\/tr>\n<\/table>\n<hr width=\"800\" noshade=\"noshade\"\/><span class=\"style6\"><br \/><span class=\"style2\">\u00a92019 &#8211; All Rights Reserved by <a href=\"http:\/\/HelpMeFindFreedom.Online\">HelpMeFindFreedom.Online<\/a><br \/><a href=\"http:\/\/www.website.ws\/kvmlm2\/my.dhtml?sponsor=geekzonehostingcom&amp;bannercode=gif002&amp;language=english\"><img decoding=\"async\" src=\"http:\/\/images.website.ws\/images\/english\/banners\/kvmlm2\/468x60_02.gif\" border=\"0\"\/><\/a><\/span><\/span><\/div>\n<p>&#13;<br \/>\n<\/body><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#13; &#13; &#13; &#13; &#13; &#13; &#13; &#13; \u00a0 &#13; \u00a0&#13; &#13; &#13; &#13; Article Navigation &#13; Back To &#13; Main Page &#13; &#13; &#13; \u00a0 &#13; Click Here &#13; for more articles &#13; &#13; &#13; &#13; &#13; &#13; &#13; &#13; &#13; &#13; &#13; &#13; &#13; For Entrepreneurs A Simple IRA May Be Best &#13; [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-6486","post","type-post","status-publish","format-standard","hentry","category-adsense-business-in-a-box"],"_links":{"self":[{"href":"https:\/\/on-line-interactivity.com\/blog\/wp-json\/wp\/v2\/posts\/6486","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/on-line-interactivity.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/on-line-interactivity.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/on-line-interactivity.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/on-line-interactivity.com\/blog\/wp-json\/wp\/v2\/comments?post=6486"}],"version-history":[{"count":0,"href":"https:\/\/on-line-interactivity.com\/blog\/wp-json\/wp\/v2\/posts\/6486\/revisions"}],"wp:attachment":[{"href":"https:\/\/on-line-interactivity.com\/blog\/wp-json\/wp\/v2\/media?parent=6486"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/on-line-interactivity.com\/blog\/wp-json\/wp\/v2\/categories?post=6486"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/on-line-interactivity.com\/blog\/wp-json\/wp\/v2\/tags?post=6486"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}