SEP IRA Contributions for Employees

Filed in archive Uncategorized on December 8, 2011

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SEP IRAs are a type of employee pension plan that allow employers to make contributions towards their employee's retirement as well as their own retirement if they are self-employed. This is very important due to the instability of the financial market both in the United States and the United Kingdom. With pass the financial crisis leaving many unemployed still to date, it can be said that setting up such contributions for the future will be a helpful investment that can be used in the coming years.

People who started SEP IRA plans when they were self-employed, and later left self-employment to work for an employer, will not be able to continue making contributions to that SEP IRA because contributions are based on the earnings from that business.

If the SEP IRA is no longer active, there are a couple of things you can do with it. Options include keeping the SEP IRA account as it (not making additional contributions) or terminating the SEP IRA plan and rolling it over to an IRA. You can terminate the plan by contacting the financial institution that administers the plan. You do not need to contact the IRS to let them know you are terminating the plan.