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|Subject: Setting Up SIMPLE IRA||Date: 9/29/1998 6:14 PM|
|Author: KCofMaine||Number: 5731 of 76078|
I am thinking, for 1999, of setting up a SIMPLE IRA. Any other self employed folks on this board have any experience with such?
I am a sole proprietor, and I am my only employee. I understand I can defer up to $6,000. Then I must match with something, say 2% of my annual income. I guess I just send a letter to my broker telling him how much is a salary deferal and how much is contributed by me. But, it seems to me, in my case, that it comes out of the same pocket. Can I just make a $6,000 contribution and say nothing more, or MUST I send a letter with the contribution stating how much of the total is a 2% match.
Also, I won't know my income until I do my tax return. I am not an S Corp and don't receive a salary per se. I won't know how much I earned in net income until the end of January. I understand there must be regular and timely deferrals. Since I am the only one, and my income is unknown until the end of the year, am I essentially shut out of this plan. Or, can I just make a lump sum deferral (with 2% match) at the end of the year??
Also, can I take my income amount from my Schedule SE instead of my Schedule C? My SE income is significantly higher than my C income.
Help...I've talked with the IRS on the phone and they don't seem to know much, and only can read publications on the phone...and are not able to answer these questions. I've ordered the publications to see if I can gain what the IRS people are not able to tell me. I thought, in the meantime I would submit my scenario to fellow Fools.
Thanks in advance for your help.
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