The Money Farm Team

Because of their tax-free status and lack of required minimum distributions (RMDs) during the original owner’s lifetime, Roth IRAs are attractive accounts for investors to bequeath to their descendants. If you are at least 591/2 years old and have had a Roth IRA account for at least five years, you can make Roth contributions with […]

The primary distinction between a Roth IRA and a 401(k) is how they are taxed. You invest pretax cash in a 401(k), lowering your taxable income for the year. A Roth IRA, on the other hand, allows you to invest after-tax cash, which means your money will grow tax-free. Is anyone else feeling like they’ve

If you expect to have a better income in retirement than you do today, a Roth IRA or 401(k) is the best option. A regular IRA or 401(k) is likely the better bet if you expect your income (and tax rate) to be lower in retirement than it is now. A typical IRA permits you

Employer-sponsored qualified retirement plans must meet IRS rules in order to be tax-advantaged. 401(k)s, 403(b)s, SEPs, and SIMPLE IRAs are all examples of qualifying retirement plans. Traditional IRAs, while they offer many of the same tax benefits as 401(k) plans, are not eligible plans since they are not sponsored by employers. How much can I

You can’t contribute more than the lesser of the following amounts to each employee’s SEP-IRA each year: $61,000 in 2022 ($58,000 in 2021; $57,000 in 2020; and later years subject to annual cost-of-living increases). These limits apply to all defined contribution plans, including SEPs, that you design for your employees. Employee compensation of up to

ERISA does not stand for “Every Ridiculous Idea Since Adam,” contrary to popular belief. Instead, it stands for the Employee Retirement Income Security Act of 1974, which is an acronym. The Employee Retirement Income Security Act of 1974 (ERISA) is a federal legislation that governs employer-sponsored retirement and health plans. (Because IRAs are not sponsored

A SEP IRA is an employer-sponsored retirement plan that sole entrepreneurs, partnerships, and companies can establish. The annual contribution limits for SEP IRAs are much larger than for ordinary IRAs. Employers, not employees, contribute to SEP IRAs, and the amount and timing of contributions can vary from year to year. Employees handle their SEP IRA

Employer-sponsored qualified retirement plans must meet IRS rules in order to be tax-advantaged. 401(k)s, 403(b)s, SEPs, and SIMPLE IRAs are all examples of qualifying retirement plans. Traditional IRAs, while they offer many of the same tax benefits as 401(k) plans, are not eligible plans since they are not sponsored by employers. Is a SEP IRA

As an adjustment to income, you can deduct a portion of the self-employment tax you paid. As a result, even if you don’t itemize deductions, you can claim the deduction. Use Form 1040 to claim the deduction as an adjustment to your gross income. A new deduction was provided by the Small Business Jobs Act

Employers can contribute to their employees’ retirement savings through simplified employee pension (SEP) individual retirement plans, which are tax-deferred funds. Employer contributions are eligible for normal tax benefits, and most of the tax laws for individual accounts are the same as for traditional IRAs. Most employer-sponsored retirement plans involve start-up and ongoing charges, while a