Welcome to the MDTAXES Message Board

The MDTAXES Network is an affiliation of CPAs that specialize in the tax planning and preparation for young health care professionals.  Please leave your questions or comments for our CPAs, who visit the message board regularly, or review the answers, suggestions and ideas posted in response to your colleagues' questions.

Please check out our other Message Boards available at www.FindAGoodCPA.com.

Please note: We are NOT affiliated with the Maryland Tax Department. If you're looking for information about Maryland income taxes, go to www.marylandtaxes.com.

Return to Website  > Index  > General Tax Issues  > Original MDTAXES Forum  > Re: Re: Re: Re: IRA - SEP-IRA
Recent Posts
 
Original MDTAXES Forum
Start a New Topic 
Author
Comment
View Entire Thread
j
jsimmons@ida.net
Jun 15, 2008 - 10:55AM
Re: Re: Re: Re: IRA - SEP-IRA

Adrian,

If you have employees, a SEP-IRA is a terribly costly way to gain a tax deduction and save for retirement. Let me illustrate. Suppose you earn $230,000 or more. You want to put in the max $46,000 into the SEP-IRA. You have two employees, one earning $45,000 a year and the other earning $35,000 a year. Into the SEP-IRA, you'll be putting into the SEP-IRA for one $9,000 and for the other $7,000.

Using a cross-testing 401k you could likely cut that $16,000 a year cost in required contributions for your staff to just $4,000. It depends on factors such as age and so forth, but as you can see, the savings could be $12,000 a year.

Zip Code: 83402

Return to Website  > Index  > General Tax Issues  > Original MDTAXES Forum  > Re: Re: Re: Re: IRA - SEP-IRA