Baby boomer business owners – Consider a SEP-IRA
The Wall Street Journal suggests that Joe the Plumber should get a SEP-IRA to protect his profits from being taxed. So what is a SEP-IRA?
A SEP-IRA is a Simplified Employee Pension IRA (Individual Retirement Account), which allows you to make contributions to your own and employee retirements. SEP-IRAs essentially function as “profit-sharing” plans, because they allow contributions based on owner and employee compensation, including bonuses.
SEP-IRAs work the same way as other types of IRA’s:
Limits on how much you can contribute to them each year,
Penalties and interest for withdrawal before age 59 1/2 (with some exceptions). …read more
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