IRS Publication 560: Retirement Plans for Small Business (SEP, SIMPLE and Qualified Plans)

Definition of 'IRS Publication 560: Retirement Plans for Small Business (SEP, SIMPLE and Qualified Plans)'


A document published by the Internal Revenue Service (IRS) that provides information for business owners who wish to set up retirement plans for themselves and their employees. It outlines what type of plan to set up, how to set it up, how much can be contributed, how much is deductible, how to treat distributions and how to report information about the plan to both the IRS and to employees.

IRS Publication 560 provides specific information for Simplified Employee Pension (SEP), SIMPLE IRAs, and qualified plans, which include Keoghs (for the self-employed) and 401(k)s.

Investopedia explains 'IRS Publication 560: Retirement Plans for Small Business (SEP, SIMPLE and Qualified Plans)'


Contributions that a business owner makes to a personal plan or on behalf of the employees are typically allowed to be deducted. Each type of plan covered in the document has its pros and cons, and some plans are not available to employers of a certain size.

IRS Publication 560 provides a quick reference chart to employers, which indicates the last date for contribution in the tax year, the maximum contribution that can be made to the plan, the maximum deduction allowed, and when the plan can be set up.



comments powered by Disqus
Hot Definitions
  1. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious debt when government leaders use borrowed funds in ways that don't benefit or even oppress citizens. Some legal scholars argue that successor governments should not be held accountable for odious debt incurred by earlier regimes, but there is no consensus on how odious debt should actually be treated.
  2. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the acquiring company will make an offer for the outstanding shares.
  3. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by additional investment would not warrant the expense. A harvest strategy is employed when a line of business is considered to be a cash cow, meaning that the brand is mature and is unlikely to grow if more investment is added.
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will be executed at a specified price (or better) after a given stop price has been reached. Once the stop price is reached, the stop-limit order becomes a limit order to buy (or sell) at the limit price or better.
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The principle states that, for many phenomena, 20% of invested input is responsible for 80% of the results obtained. Put another way, 80% of consequences stem from 20% of the causes.
  6. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The principle states that, for many phenomena, 20% of invested input is responsible for 80% of the results obtained. Put another way, 80% of consequences stem from 20% of the causes.
Trading Center