SIMPLE IRAs

Who can establish a SIMPLE IRA Plan?

• is a sole proprietorship, partnership, corporation, or tax-exempt organization,
• employs 100 or fewer employees who each received at least $5,000 in compensation from the company during the previous year, and
• does not currently maintain another company-sponsored plan (e.g., SEP, SAR-SEP, Profit Sharing, 401(k), etc.)

Why provide a SIMPLE IRA Plan?

• Easy to Establish, Simple to Maintain

  We provide all the necessary documents and enrollment materials you need to make offering a retirement plan as streamlined and convenient as possible. Also, 5500 Series form reporting is not required. You simply take a deduction on your business tax return for the contributions to your employees’ SIMPLE IRA accounts.

• Reduce Your Current Year Taxes

  Contributions to a SIMPLE IRA Plan are considered a business expense and are tax-deductible for you, the employer.

• Tax-Favored Contributions

  Each employee’s taxable income is reduced by the amount of his or her salary deferral contributions. Your employees do not pay income taxes on contributions until they begin to withdraw money from the plan, usually at retirement. This means that their investment can accumulate more quickly than in a taxable investment vehicle.

• Retirement Planning Control

  The money contributed to a SIMPLE IRA Plan, as well as the investment earnings, are 100% vested. This means that you and your employees will always have complete control over your own retirement accounts. This provides additional retirement savings power.

• Low-Cost

  With a SIMPLE IRA Plan, there is no setup fee to establish your plan. There is an annual $10 maintenance fee for each SIMPLE IRA account. This fee is waived for accounts with balances over $10,000.

Frequently Asked Questions

Can we answer your question here? ------------------------------------ Who is considered an "eligible" employee? What are the contribution limits? What are "catch-up" contributions? What is considered “compensation”? Can I set up a vesting schedule? When are contributions to the plan due? What is the deadline for establishing a SIMPLE IRA? Can employees take money out of the plan at any time? When must participants begin taking distributions? Are contributions reported as taxable income? How are salary deferrals treated for tax purposes?

Any tax or legal information in this website is merely a summary of our understanding and interpretations of some of the current income tax regulations and is not exhaustive. Investors should consult their tax advisor or legal counsel for advice and information concerning their particular situation. Wells Fargo Funds Management, LLC, Wells Fargo Funds Distributor, LLC, nor any of their representatives may give legal or tax advice.