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Need Some Deductions for 2011?
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Updated for 2011
SIMPLE Plans
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SIMPLE Plan Salary Reduction Contribution Limits
For tax year 2011, the maximum amount each eligible employee can choose to have his/her employer contribute to his/her SIMPLE IRA cannot be more than $11,500.
These contributions must be expressed as a percentage of the employee's compensation unless you permit the employee to express them as a specific dollar amount.
The employer cannot place restrictions on the employee's own contribution amount except to comply with the $11,500 limit.
Plan participants who are age fifty (50) or over at the end of the calendar year can make catch-up contributions. The catch-up contribution for tax year 2011 is $2,500.
Who Contributes to a SIMPLE IRA?
Both the employees and the employer contribute to SIMPLE IRAs.
Employees:
Under a SIMPE plan, employees can choose to contribute part of their pay (salary reduction contributions) to their own SIMPLE IRA account.
Employer:
The employer, is required to make either:
- Matching or
- Nonelective (mandatory) contributions on behalf of employees.
Next:
SIMPLE Plans: Matching and Nonelective Contributions; Choosing a Lower Matching Percentage
Related Links
- What is a SIMPLE Plan?
- Who Can Participate in a SIMPLE Plan?
- Setting Up a SIMPLE Plan
- SIMPE IRAs
- Eligible Employees
- When to Set Up a SIMPLE Plan
- Nonelective Contributions
- How Much Can a Nonelective Contribution Be?
- Maximum Compensation
- Time Limit for Employer to Deposit Salary Reduction Contributions
- Form W-2 Reporting for SIMPLE IRA Contributions
- Deducting Matching and Nonelective Contributions
- Timing Deductions for Contributions
- Two Ways To Set Up a SIMPLE Plan
- After the SIMPLE Plan is Set Up
- What is an Eligible Employees?
- What is an Excludible Employee?
- When To Set Up a SIMPLE IRA Plan
- Notification Requirement
- Election Period
- SIMPLE 401 (k) Plans
- Distributions, Rollovers, and Withdrawals
- Credit for Small Employer Pension Plan Startup Costs
- Credit for Qualified Retirement Savings Contributions
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