SEP IRAs (Simplified Employee Pension)
| YEAR |
CONTRIBUTION |
CONTRIBUTION IF OVER THE AGE OF 50 |
DEADLINE TO OPEN IRA |
DEADLINE TO CONTRIBUTE TO IRA |
| 2020 |
$57,000 |
– |
Employer’s Tax Filing Deadline (plus extensions) |
Employer’s Tax Filing Deadline (plus extensions) |
| 2021 |
$58,000 |
– |
Employer’s Tax Filing Deadline (plus extensions) |
Employer’s Tax Filing Deadline (plus extensions) |
Key Features:
- Easy to set up and operate
- Low administrative costs
- Flexible annual contributions
- Employer must contribute equally for all eligible employees
- Maximum contribution per participant is the lesser of 25% of the employee’s compensation (20% if self-employed) OR $58,000 for 2021 ($57,000 for 2020)