I am retiree, drawing from my 403(b) annuity. I am the sole employee of my own business. Do I qualify for a SIMPLE IRA account? I want to defer some of my income from taxes.

By Denise Appleby AAA
A:

It depends. If your business is unincorporated, and you have net earnings from self-employment, you are eligible to establish and fund a retirement plan, including a SIMPLE IRA, based on that income. The IRS defines net earnings from self-employment as gross income from your trade or business minus allowable business deductions. If your business is incorporated, you may establish a retirement plan for the business and your contributions will be based on W-2 wages you receive from the business.

IRS publication 560 includes a definition of net earnings from self-employment as well as other important information about establishing a retirement plan for your business.

(For further reading, see IRA Contributions: Eligibility and Deadlines, Plans the Small Employer Can Establish and Simple IRA Tutorial.)


This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS

  1. Are annuities for seniors only?

    Understand the benefits of investing in annuities at a younger age and how fixed or variable annuities might benefit the ...
  2. What is a longevity annuity?

    Understand all the characteristics of a longevity annuity contract, the purpose of a longevity annuity and what type of investor ...
  3. What are the main goals of human resources planning?

    Learn about human resource planning, a business strategy that heavily incorporates workforce considerations into long-term ...
  4. How are labor demand forecasts made in human resources planning?

    Discover how human resource planning might be used to estimate the correct demand for labor in a given market, both qualitatively ...
RELATED TERMS
  1. Separation Of Powers

    An organizational structure in which responsibilities, authorities, ...
  2. Lilly Ledbetter Fair Pay Act

    A federal law designed to ensure equal pay for all workers, regardless ...
  3. Age Discrimination In Employment Act Of 1967

    A federal statute protecting "certain applicants and employees" ...
  4. Civil Rights Act of 1964

    Landmark federal legislation that prohibits discrimination on ...
  5. Senior Move Manager

    Senior move managers (SMMs) help seniors downsize and relocate ...
  6. Pre-Disability Earnings

    The amount of qualifying income that a disability insurance policyholder ...

You May Also Like

Related Articles
  1. Professionals

    Just Retired? No Better Time for a Second ...

  2. Professionals

    When Your Client's Retirement is Around ...

  3. Professionals

    A New Wake-up Call for Savers

  4. Professionals

    Retirement Bliss? Not So fast: When ...

  5. Professionals

    Multiple Accounts? Here's How to Calculate ...

Trading Center