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

AAA

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.




RELATED TERMS
  1. IRS Publication 587: Business Use ...

    A document published by the Internal Revenue Service (IRS) that ...
  2. Employee Savings Plan

    A pooled investment account provided by an employer that allows ...
  3. Simplified Employee Pension - SEP ...

    A retirement plan that an employer or self-employed individuals ...
  4. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  5. Savings Incentive Match Plan For ...

    A retirement plan that may be established by employers, including ...
  6. Keogh Plan

    A tax deferred pension plan available to self-employed individuals ...
RELATED FAQS
  1. How is cost basis calculated on an inherited asset?

    Typically, the cost basis on inherited assets is the fair market value as of the time of the decedent's death or actual transfer ... Read Full Answer >>
  2. How is market value determined in the real estate market?

    Anyone who has ever tried to purchase or sell a home has probably heard a lot about the property's fair market value, or ... Read Full Answer >>
  3. What types of capital are not considered share capital?

    The money a business uses to fund operations or growth is called capital, and there are a number of capital sources available. ... Read Full Answer >>
  4. How does the role of Medicare/Medicaid affect the drugs sector in the U.S.?

    Medicare and Medicaid have enormous influence on the pharmaceutical, or drugs, sector in the United States. For instance, ... Read Full Answer >>
  5. In what instances does overhead qualify for certain tax allowances?

    Businesses are just as keen as anyone else to keep their tax burdens low by any means possible. Overhead expenses often qualify ... Read Full Answer >>
  6. What are the ethical arguments against government subsidies to companies like Tesla?

    The ethical argument behind government subsidies is that they should be put into place to help industries that will, in turn, ... Read Full Answer >>
Related Articles
  1. Entrepreneurship

    Business Owners: How To Set Up An SEP IRA

    SEP IRAs are simple to set up and run, making them a popular choice for business owners.
  2. Entrepreneurship

    Tax Credit For Plan Expenses Incurred By Small Businesses

    Determine whether your business is eligible to claim a tax credit for establishing a retirement plan.
  3. Retirement

    SIMPLE IRA Vs SIMPLE 401(k) Plans

    See the differences that may cause an employer to choose one plan over the other.
  4. Entrepreneurship

    Plans The Small-Business Owner Can Establish

    Don't hesitate to adopt a smart plan for you and your employees.
  5. Taxes

    Common Questions About Retirement Plans

    We offer some solutions for the individual taxpayer as well as the small business owner.
  6. Professionals

    Is Your Financial Advisor Looking Out for You?

    Financial advisors sometimes aren't looking out for clients' best interests. Regulators are scrutinizing their practices; investors should too.
  7. Investing

    Can Donald Trump Really Win the Presidency?

    Understand why demographic trends and his lack of broad appeal are likely to keep Donald Trump from being a serious contender for the presidency.
  8. Professionals

    How to Avoid Scuttling Your Client’s Retirement

    Bad habits can ruin a retirement portfolio (and your credibility as an advisor). Here are some practices to avoid.
  9. Savings

    Interest Rates and Your 401(k): How They Tango

    Here's how a rise in interest rates will likely impact your 401(k).
  10. Investing Basics

    Got Dividends? Here's How to Reinvest Them

    Reinvesting dividends is almost always a good idea if you intend to hold your shares for the long term, and there are several ways to do it.

You May Also Like

Hot Definitions
  1. Topless Meeting

    A meeting in which participants are not allowed to use laptops. A topless meeting organizer can also ban the use of smartphones, ...
  2. Hedging Transaction

    A type of transaction that limits investment risk with the use of derivatives, such as options and futures contracts. Hedging ...
  3. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  4. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  5. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  6. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!