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Overview SEP IRAs SIMPLE IRAs SEP or SIMPLE Comparison FAQs
Plan sponsors

SEP IRAs are generally well-suited to small companies with fluctuating cash flows. Eligible sponsors include self-employed individuals, sole proprietors, partnerships and owners of unincorporated or incorporated businesses.

Tax advantages
  • Employer contributions are tax-deductible as a business expense.
  • Any investment earnings grow tax-deferred until withdrawn, usually during retirement when investors are in a lower tax bracket.
Other benefits
  • Flexibility to contribute or not
  • No annual tax filings or complex IRS regulations
  • Broad range of investment choices
Employee eligibility requirements*

Eligibility may be limited to employees who:

  • Are at least 21 years old
  • Have worked at your firm in at least three of the last five years
  • Will earn $550 or more during the current year

* Requirements may be less restrictive to include more employees, if desired.

Employee contributions

None. SEP IRAs are funded entirely with employer contributions.

Employer contributions
  • Employer contributions are discretionary each year and can range from 0% to 25% of compensation, up to a maximum of $51,000 and $52,000 per participant for the 2013 and 2014 plan years.
  • Sole proprietors can contribute up to 20% of net earnings.
  • Employers must contribute the same percentage of compensation to each eligible employee.
How to get started
  • Employer fills out IRS Form 5305-SEP and an IRA Adoption Agreement.
  • You can receive these forms from your advisor or by contacting our Fund Services at 1-800-480-4111.

The information above is not intended to provide and should not be relied on for accounting, legal and tax advice or investment recommendations. The views and strategies described may not be suitable to all readers. Please contact your financial professional or tax advisor for additional information.

Asset allocation/diversification does not guarantee investment returns and does not eliminate the risk of loss.

IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.