cluding vesting and the allocation of contributions. SEP contributions are always 100% vested in the employees so there is no vesting schedule to keep track of. Additionally, each employee generally receives the same percentage of pay contribution. So the contributions are easy to calculate. Alternatively, you may choose to purchase a SEP document that “integrates” with Social Security to provide a larger contribution for higher wage earner, which is usually the business owner.

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Extensive paperwork, high costs and complicated administration associated with certain qualified retirement plans may cause many small businesses to shy away from establishing any retirement plan at all. This may be true of your small business, even though you recognize the many tax and employee retention benefits of providing a plan. Whether you are a doctor, lawyer, free-lance writer, artist, manufacturer’s representative or another type of self-employed business owner, the Simplified Employee Pension Plan, or SEP-IRA plan, may be a good fit for your small business.

Although a SEP IRA account is technically an Individual Retirement Arrangement (IRA), the SEP plan functions more like a cross between an IRA and a profit sharing plan. As with a profit sharing plan, your small business may make a tax deductible contribution to each employee’s SEP IRA account up to the lesser of 25 percent of compensation or $44,000 (2006). The business owner has the flexibility to choose any level of contribution (within the above limits). The business owner has the discretion to set the contribution amount as low as zero. This can come in handy in years when business cash flow is a little less than desirable. But, it is the difference from, not the similarity to, a profit sharing plan that really makes the SEP too good to overlook: the SEP is simple.

The simplicity of the SEP significantly distinguishes it from the traditional profit sharing plan. A SEP is easy to establish and maintain, which makes it less expensive than a profit sharing plan. The SEP may be established by any corporation (“S” or “C”), partnership, non-profit organization or sole proprietor. There is no complicated adoption agreement to purchase, complete or file with the Internal Revenue Service (“IRS”). A simple one page form is all that is required to establish a basic SEP and this form may be obtained at no cost.

Other aspects of the SEP illustrate its simplicity as well, including vesting and the allocation of contributions. SEP contributions are always 100% vested in the employees so there is no vesting schedule to keep track of. Additionally, each employee generally receives the same percentage of pay contribution. So the contributions are easy to calculate. Alternatively, you may choose to purchase a SEP document that “integrates” with Social Security to provide a larger contribution for higher wage earner, which is usually the business owner.

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loyee Pension Plan, or SEP-IRA plan, may be a good fit for your small business.

Although a SEP IRA account is technically an Individual Retirement Arrangement (IRA), the SEP plan functions more like a cross between an IRA and a profit sharing plan. As with a profit sharing plan, your small business may make a tax deductible contribution to each employee’s SEP IRA account up to the lesser of 25 percent of compensation or $44,000 (2006). The business owner has the flexibility to choose any level of contribution (within the above limits). The business owner has the discretion to set the contribution amount as low as zero. This can come in handy in years when business cash flow is a little less than desirable. But, it is the difference from, not the similarity to, a profit sharing plan that really makes the SEP too good to overlook: the SEP is simple.

The simplicity of the SEP significantly distinguishes it from the traditional profit sharing plan. A SEP is easy to establish and maintain, which makes it less expensive than a profit sharing plan. The SEP may be established by any corporation (“S” or “C”), partnership, non-profit organization or sole proprietor. There is no complicated adoption agreement to purchase, complete or file with the Internal Revenue Service (“IRS”). A simple one page form is all that is required to establish a basic SEP and this form may be obtained at no cost.

Other aspects of the SEP illustrate its simplicity as well, including vesting and the allocation of contributions. SEP contributions are always 100% vested in the employees so there is no vesting schedule to keep track of. Additionally, each employee generally receives the same percentage of pay contribution. So the contributions are easy to calculate. Alternatively, you may choose to purchase a SEP document that “integrates” with Social Security to provide a larger contribution for higher wage earner, which is usually the business owner.

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any level of contribution (within the above limits). The business owner has the discretion to set the contribution amount as low as zero. This can come in handy in years when business cash flow is a little less than desirable. But, it is the difference from, not the similarity to, a profit sharing plan that really makes the SEP too good to overlook: the SEP is simple.

The simplicity of the SEP significantly distinguishes it from the traditional profit sharing plan. A SEP is easy to establish and maintain, which makes it less expensive than a profit sharing plan. The SEP may be established by any corporation (“S” or “C”), partnership, non-profit organization or sole proprietor. There is no complicated adoption agreement to purchase, complete or file with the Internal Revenue Service (“IRS”). A simple one page form is all that is required to establish a basic SEP and this form may be obtained at no cost.

Other aspects of the SEP illustrate its simplicity as well, including vesting and the allocation of contributions. SEP contributions are always 100% vested in the employees so there is no vesting schedule to keep track of. Additionally, each employee generally receives the same percentage of pay contribution. So the contributions are easy to calculate. Alternatively, you may choose to purchase a SEP document that “integrates” with Social Security to provide a larger contribution for higher wage earner, which is usually the business owner.

The un

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