Accounting News and Notes

2009 Simple IRA Plans…Planning for a Better Retirement

A Savings Incentive Match Plan for Employees, a SIMPLE IRA plan is well suited for smaller employers. A company can select his plan if it has as little as one employee up to one hundred. A SIMPLE IRA is a relatively new entrant into tax law, and were established so small businesses could offer substantive benefits to their staff without the burdens of a SPD/Originating Plan Document to set up a plan, and the “top heavy” testing which a 401K requires. All monies taken out of an employee’s paycheck and forwarded to a retirement account of any type are immediately vested and owned by the employee. However, they are subject to the tax law and guidelines of any established plans and their contracted documents. SIMPLE IRA’s have to be set up by October 1st of this year in order for them to be effective for 2009. Employees can set aside out of their payroll $11,500 in 2009. This limit is indexed and is updated periodically for inflation. For those over fifty years of age there is a “catch-up” provision which allows for an additional $2500 to be withheld each year. The company then as a required matching which ranges from two to three percent so employees also receive the result of this benefit.

John Dillard is an author and Certified Public Accountant (All Rights Reserved). To See how he takes Christ along with him to work visit http://www.hiscpa.com/ (a Christian CPA firm) and for his latest book Overcoming Life’s 9/11’s: Job’s Journey visit http://www.john-dillard.com/

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Preparing the S Corporation Income Tax Return K-1 A Guide How to Guide to Prepare a K-1

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