I'm thinking of starting a SEP/IRA, but am ignorant of what I have to do to get one started. Is it simply a matter of filling out an application with my on-line broker? Or do I need some official proof that I was really self-employed? Thanks,Scott
Scott: We have had a SAR/SEP at my company for 5 years. You really only have to fill out a one page IRS form, which you keep on file. You generally have to provide a trustee (like a mutual fund company) a copy of the document, but you do not have to file this document with the IRS.But allow me to suggest something different: a SIMPLE IRA. SIRA's are new - coming into existence something like 2 years ago. They address a real limitation of the SEP - namely that owner's contributions are limited by the average contribution of non-owners.If you don't have any employees, it is not that big of a deal, and you may be able to contribute more with a SAR/SEP. But for us - the SIRA is great. Our SAR/SEP dies in two weeks and our SIRA is born.As far as researching this stuff, just enter in some of keywords in some internet search engines. You will find that the bix six acctg firms, and numerous other advisors, mutuals, etc, have pages which describe the various plans.Good luck.
<<I'm thinking of starting a SEP/IRA, but am ignorant of what I have to do to get one started. Is it simply a matter of filling out an application with my on-line broker? Or do I need some official proof that I was really self-employed? >>Well, the big question is your eligibility regarding the SEP/IRA. If you are simply selfed employed, and have no other employees, it should be a simple procedure. Your broker will probably not give you any problem whasover...since the liability for screwing up doesn't lie with the broker, but with YOU. If you open a SEP, and are not qualified to do so, it's YOUR problem with the IRS...and not the brokers problem. So I doubt that the broker will be a factor.You might want to check out IRS Publications 560 and 590 regarding self employed pension plans. You might also want to check out IRS Form 5305-SEP and instructions to review your eligilibility. You can view/download these pubs and forms via the IRS web site at: http://www.irs.ustreas.govTMF TaxesRoy
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