SEP Plans and San Francisco Small Businesses – Separate Ways?

Filed in CPA Blog by on January 21, 2014
Tags: ,

Simplified employee pension (SEP) plans are commonly used by self-employed individuals and others with party-time self-employment income. Many in San Francisco and throughout the San Franciso Bay Area are individual entrepreneurs whose income may vary, year by year. SEP plans can be an important part of tax planning, plus allow you to give your employees some favorable retirement benefits.

SEP Plans and San Francisco Businesses

SEP Plans and San Francisco BusinessesSEP plans are relatively simple to set up, and the contribution levels are generous: up to $52,000 maximum for 2014. That means that your San Francisco business can “tax defer” up to $52,000 in income. The catch? You must provide access to your employees for some of that income, but as the business owner you can work with your tax planner to maximize the tax and monetary benefits to you, while also providing some retirement income for your employees. SEP plans can be very much win/win. Another advantage is that you can defer the date upon which you make a SEP contribution until you actually file your taxes. With tax extensions that can be as far out as August. To learn more about SEP plans, download our February client bulletin, here. You can also browse the official IRS information on SEP plans, here. IRS Circular 230 Notice The Internal Revenue Service requires Safe Harbor LLP to inform the reader that any tax advice contained in this correspondence cannot be used for the purpose of avoiding penalties under the Internal Revenue Code or for promoting, marketing or recommending to another party any transaction or matter addressed.

Comments are closed.