Simplified Employee Pension Plans For Small Businesses

Simplified Employee Pension Plans For Small Businesses

Employees seated in an office talking

The employer can deduct all of the contributions made to the plan, and it is not considered to be taxable income to the employees (although employees will owe taxes when they take withdrawals from their accounts). Any investment earnings are tax-deferred until withdrawal, too.

The SEP plan is easy to operate. It's a tax-deductible way for small-business owners to attract and retain employees while also saving for their own retirement; after all, the owner is generally an eligible participant.