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| Previous Page: 535-Employees' Pay-Kinds of Pay Next Page: 535-Simplified Employee Pension (SEP) Use   to find additional instances of index items. |
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Retirement Plans | |
Important Changes | |
| Many changes to the tax laws for retirement plans were made by the Economic Growth and Tax Relief Reconciliation Act of 2001 that was enacted on June 7, 2001. However, most of those changes do not take effect until after December 31, 2001, and are not covered in this chapter. For information about those changes, see Publication 560, Retirement Plans for Small Business, or Publication 553, Highlights of 2001 Tax Changes. | |
Introduction | |
| This chapter discusses retirement plans you can set up and maintain for yourself and your employees. Retirement plans are savings plans that offer you tax advantages to set aside money for your own and your employees' retirement. | |
| In general, a sole proprietor or a partner is treated as an employee for participating in a retirement plan. | |
| SEP, SIMPLE, and qualified plans offer you and your employees a tax favored way to save for retirement. You can deduct contributions you make to the plan for your employees. If you are a sole proprietor, you can deduct contributions you make to the plan for yourself. You can also deduct trustees' fees if contributions to the plan do not cover them. Earnings on the contributions are generally tax free until you or your employees receive distributions from the plan in later years. | |
| Under certain plans, employees can have you contribute limited amounts of their before-tax pay to a plan. These amounts (and the earnings on them) are generally tax free until your employees receive distributions from the plan in later years. | |
| In general, individuals who are employed or self-employed can also set up and contribute to individual retirement arrangements (IRAs). | |
Useful items | |
| Publication 560: Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans) 590: Individual Retirement Arrangements (IRAs) | |
| Form (and Instructions) W–2 Wage and Tax Statement | |
| See chapter 14 for information about getting publications and forms. | |
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