Written by Marc R Barnes EA
October 20, 2010
The easiest retirement plans to set up and administer

Despite the many advantages of qualified retirement plans, many small business owners don’t take the time to sit down with their tax preparer and discuss the options that are available to them. If you are a small business owner, a Simplified Employee Pension (SEP) may be a good option to explore.

A SEP is a form of IRA arrangement with you, as employer, making contributions to your own SEP IRA. The amount that can be contributed and deducted to your SEP account is based on the income from your business.

Start-up costs for a SEP generally are low because you can use a prototype plan instead of creating a plan of your own. Reporting requirements also are minimal when there is a single participant in the plan.

The deadline for establishing a SEP and making the contribution for the year is the income tax return due date for the year, plus filing extensions. A SEP is the only type of plan that you can set up after the year has ended.