Self Directed SEP IRA

Self Directed SEP IRA Basics:

Simplified Employee Pension (SEP) IRAs are a popular option for self-employed individuals and offer higher contribution limits than other types of plans like Traditional and Roth IRAs.

Why Consider a Self Directed SEP IRA?

  • A Self Directed SEP IRA does not have the start-up and operating costs of a conventional 401K or profit sharing employer plan.
  • It allows for a tax-deductible contribution of up to 25% percent of each employee’s pay.
  • You are self-employed, a sole proprietor, independent contractor, partner, corporation, or S corporation.
  • Your business pays no taxes on investment earnings.
  • You don’t want to be locked into making contributions every year.
  • You’d like a plan with low administrative costs.
  • You’re looking for a wider range of investment choices, including real estate, real precious metals, notes, LLCs and more.

Please consult your tax professional for the plan that best suits your individual needs.

Funding Your Self Directed SEP IRA:

You have the ability to fund a SEP IRA with annual contributions, IRA to IRA transfers, and Employer Plan Rollovers.

With a SEP, you have the ability to choose the percentage of contribution for any given year (0-25% of earned income) for yourself and your staff. The only requirement is that the contribution percentage, in any year, be the same for each employee. Keep in mind that the maximum compensation amount that can be used for calculating your contribution is $250,000 (2012).

Self Directed SEP IRA Contribution Limits:

2012 – Up to 25% of compensation, with a maximum of $50,000