SEP IRAs benefit self-employed individuals and small-business owners, and have a number of advantages over other retirement plans, including:

• SEP IRAs are easy to establish and maintain.
• There are no mandatory contributions or annual tax filings.
• Reduced paperwork.
• In addition to potential tax credits, tax-deductible contributions can help decrease current taxes, and tax-deferred compounding can help both employers and employees build retirement assets. Consult your tax advisor for additional information.

SEP IRAs are available if you have income from being self-employed either full- or part-time, or if you are an employee of someone who establishes a SEP IRA for their employees, including:

• Sole proprietors
• Partners
• Business owners (of either an unincorporated or incorporated business, including Subchapter S corporations)

Contributions to a SEP IRA

All contributions made under a SEP IRA are employer contributions. An employee cannot defer a portion of his or her salary and contribute it to a SEP IRA. Employers may contribute up to 25% of an employee’s compensation* ($53,000 per participant in 2015 and 2016, the highest limit allowed by law).

• Employers are not required to contribute the same percentage of compensation every year ? they may vary the percentage each year, or skip a year altogether. However, in any given year, an employer must contribute the same percentage of compensation for each eligible employee.
• SEP IRA contributions must be made by the due date (including extensions) of the employer?s tax return. The due date for a C corporation is 2½ months after the end of its taxable year. SEP IRA contributions are reported on Form 5498 in the calendar year in which they are received. Your tax form may reflect both current and prior year contributions, if both were received in the same calendar year. Please consult your tax advisor with any questions.

Withdrawals Prior to Age 59½

Withdrawals are subject to ordinary income tax and a 10% early withdrawal penalty may apply prior to age 59½. The IRS will waive this penalty** when distributions are used for:

• Certain un-reimbursed medical expenses
• Medical insurance, providing certain conditions are met
• A disability, if certain conditions are met
• Payments to designated beneficiaries in the event of the death of the IRA owner
• Payments received as an annuity
• Qualified higher-education expenses
• The purchase of a first home

* Maximum compensation on which contributions can be based is $225,000 for the 2007 plan year. For self-employed individuals, compensation is your net earnings from self-employment. For further clarification contact your tax advisor.