A savings incentive match plan for employees (SIMPLE) IRA is available to self-employed business owners with 100 or fewer employees. Like individual 401(k)s, SIMPLE IRA contributions include employee and employer contributions. However, they're easier to administer10—partly because there's no requirement to file a tax return for the plan.
Then the employer must make one of the following additional contributions:
- 1.3% match of each plan participant's salary, or
- 2.2% of each employee's salary, whether or not they contribute.
The employee must make contributions within 30 days of the end of the tax year. The employer must deposit contributions by the tax deadline, including extensions. So employer contributions are due March 15 or April 15, depending on how your business is structured if the business doesn't extend its return, or September 15 or October 15 if it does.
A SIMPLE IRA is a good option for a small business with employees. Some business owners start with a SIMPLE IRA and switch to a 401(k) plan when they have more employees.
If you want to open a new retirement account or have questions about the best ways to contribute given your particular situation, reach out to your Synovus financial advisor. They can determine a retirement saving strategy that is most appropriate for you.