IRS Qualified Business Retirement Plans

QUALIFIED PLAN & IRAs

Simplified Employee Pension Plans (SEP)

Simple IRA Plan

Roth IRA

Regular IRA

Increased Retirement Plan Contribution Limits

Uniform Lifetime RMD Table

RMD Calculator

Roth IRA Conversion Calculator

401K Plans - Solo 401k

Solo or One Person Defined Benefit Plans - Less than 10 employees

Solo DB Analysis Request

Qualified Plan Analysis Request Form

Coverdell IRA or Education Savings Account

Simplified Employee Pension Plans (SEP)

A SEP plan is an employer-contribution retirement plan for self-employed persons or small businesses (25 or fewer employees). SEP stands for Simplified Employee Pension. Employers establish a SEP plan by opening individual accounts called SEP-IRAs for each eligible employee. For 2008, your employer may contribute up to $46,000 or 25% of your compensation to your SEP-IRA.

	Sole proprietors, partnerships, corporations, nonprofit, and government entities.
	Establishment Deadline Tax filing date, including extensions.
	Contribution Deadline Tax filing date, including extensions.
	Who Contributes Employer.
	Contribution Requirements Contributions are discretionary each year.
	Employee Eligibility All employees age 21 or older who have worked three out of the last five years and have earned at least $450 in 2007
	Vesting Always 100%.
	Withdrawals Allowed anytime, subject to income tax. A 10% penalty may apply before age 59-1/2.
	Loan Feature Not available.
	Plan Administration None. 1.No more than $230,000 of compensation may be taken into account.

Simple IRA Plan

A SIMPLE plan is an employer-contribution retirement plan for self-employed persons or small businesses (100 or fewer employees). SIMPLE is an acronym for Savings Incentive Match Plan for Employees. Employers establish a SIMPLE plan by either opening individual retirement accounts (SIMPLE-IRAs) or 401(k)-type accounts for each eligible employee. For 2008, you may contribute up to $10,500 to your SIMPLE-IRA. If you are age 50 or older, you may contribute an additional $2,500, or a total of $13,000.

Roth IRA

A Roth IRA is a tax-advantaged retirement account that allows you to make an after-tax contribution of $5,000 for 2008. For persons who are age 50 or older, a special catch-up provision allows you to contribute an additional $1,000, or a total of $6,000. If you keep a Roth IRA for at least five years and are at least age 59-1/2 when you begin to withdraw from the account, the entire account may be distributed tax- and penalty-free. Your entire balance may also be distributed tax- and penalty-free if you have held the account for at least five years and are disabled, are taking out up to $10,000 to buy a first home, or payments are being made to a beneficiary or your estate after your death.

Regular IRA

A regular IRA is also called a traditional IRA. It is a tax-deferred retirement account. For 2008, you are allowed to make a tax-deferred contribution of $5,000 to a regular IRA. This account grows tax-deferred until you begin to take distributions, which you may do after you turn age 59-1/2. For persons who are age 50 or older, a special catch-up provision of the 2001 tax law allows you to contribute an additional $1,000, or a total of $6,000. You are required to begin taking distributions from a regular IRA every year after reaching age 70-1/2 according to a schedule that is based on your age and the corresponding distribution period specified in the Uniform RMD Table. (See Appendix C of IRS Pub. 590: Distribution Period Table.)

Increased Retirement Plan Contribution Limits

New IRA and Roth IRA Contribution Limits
Year	Maximum Contribution	Maximum Contribution Including Catch-Up Provisions*
2002	3,000	3,500
2003	3,000	3,500
2004	3,000	3,500
2005	4,000	4,500
2006	4,000	5,000
2007	4,000	5,000
2008	5,000	6,000
*Those who reach age 50 by the end of the year can contribute an additional $500 in 2002-2005 and an additional $1,000 for 2006 and each subsequent year.

New SIMPLE IRA Contribution Limits for Elective Deferrals
Year	Maximum Contribution	Maximum Contribution Including Catch-Up Provisions*
2006	10,000	12,500
2007	10,500	13,000
The catch up contributions are also eligible for employer matching contributions.

New Contribution Limits for Company Retirement Plans (Including 401(k)s, 403(b)s, and Section 457 Plans)
Year	Maximum Contribution	Maximum Contribution Including Catch-Up Provisions*
2007-8	15,500	20,500
*Those who reach age 50, by the end of the year can contribute an additional $5,000 in 2006 and $5,500 in 2007 and each subsequent year.

SEP Contribution Limits

If you are an employee of a company that offers a SEP for 2008 at the highest percentage, the 25%, and your income is $230,000, your employer is limited to making a $46,000 contribution to your SEP. If you are self-employed, the 25% nets down to 20%. If your 2008 net earnings from self-employment is $230,000, you would be limited to a maximum SEP contribution of $46,000 (25% of the $230,000). In 2007 the contribution percentage is 25% of $225,000 or $45,000.

Solo or One Person Plus - Defined Benefit Plans

These plans are available to individuals wishing to maximize their tax-deductible contributions to a qualified plan. Actuarial assumptions are made based on age, annual income, expected retirement age and portfolio rate of return allowing for substantial tax-deductible contributions that can easily be from $100,000 to $200,000 annually. The maximum annual retirement income benefit you can contribute towards is $180,000 in 2007 and $185,000 in 2008. Contact us for further information and illustrations. Request an analysis/quote/illustration.

Coverdell IRA or Education Savings Account

A Coverdell Education Savings Account (ESA) is an account created as an incentive to help parents and students save for education expenses.

The total contributions for the beneficiary of this account cannot be more than $2,000 in any year, no matter how many accounts have been established. A beneficiary is someone who is under age 18 or is a special needs beneficiary.

Contributions to a Coverdell ESA are not deductible, but amounts deposited in the account grow tax free until distributed. The beneficiary will not owe tax on the distributions if they are less than a beneficiary’s qualified education expenses at an eligible institution. This benefit applies to qualified higher education expenses as well as to qualified elementary and secondary education expenses.

Here are some things to remember about Distributions from Coverdell Accounts:

	Distributions are tax-free as long as they are used for qualified education expenses, such as tuition and fees, required books, supplies and equipment and qualified expenses for room and board.
	There is no tax on distributions if they are for enrollment or attendance at an eligible educational institution. This includes any public, private or religious school that provides elementary or secondary education as determined under state law. Eligible institutions also include any college, university, vocational school or other postsecondary educational institution eligible to participate in a student aid program administered by the Department of Education. Virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) postsecondary institutions are eligible.
	The Hope and lifetime learning credits can be claimed in the same year the beneficiary takes a tax-free distribution from a Coverdell ESA, as long as the same expenses are not used for both benefits.
	If the distribution exceeds qualified education expenses, a portion will be taxable to the beneficiary and will usually be subject to an additional 10% tax. Exceptions to the additional 10% tax include the death or disability of the beneficiary or if the beneficiary receives a qualified scholarship.

There are contribution limits for taxpayers based on the contributor’s Modified Adjusted Gross Income. Contributions to a Coverdell ESA may be made until the due date of the contributor’s return, without extensions.

If there is a balance in the Coverdell ESA when the beneficiary reaches age 30, it must generally be distributed within 30 days. The portion representing earnings on the account will be taxable and subject to the additional 10% tax. The beneficiary may avoid these taxes by rolling over the full balance to another Coverdell ESA for another family member.