2020 IRA Contributions & Deductions Infographic
Infographic summarizing IRS contribution limits and catch up provisions for retirement accountsLEARN MORE
The SIMPLE IRA is a plan for small businesses with 100 or fewer employees who have no other qualified plans. With a SIMPLE plan, contributions are tax-deductible, and earnings within the account are tax-free until withdrawn.
A SIMPLE IRA allows:
Employers are generally required to match each employee’s salary reduction contributions, on a dollar-for-dollar basis, up to 3% of the employee’s compensation.
You can deduct SIMPLE IRA contributions for the tax year within which the contributions were made.
You can establish a SIMPLE IRA plan if you meet BOTH of the following requirements:
You can establish a SIMPLE IRA plan only if you had 100 or fewer employees who received $5,000 or more in compensation from you for the preceding year.
Under this rule, you must take into account all employees who were employed at any time during the calendar year, regardless of whether they’re eligible to participate.
The SIMPLE IRA plan generally must be the only retirement plan to which you make contributions, or to which benefits accrue, for service in any year beginning with the year in which the SIMPLE IRA plan becomes effective.
IRA Contribution Limits, Catch Up Provisions and Contribution Deadlines