Showing your employees you appreciate them is important, but sometimes it’s hard to know what the best way to do this is. First Minnetonka City Bank can help you provide your employees with Health Savings Accounts (HSA) for employers and Simplified Employee Pension (SEP) retirement plans. These benefits are easy for you to set up and will let your staff know how much they mean to you.
SEPs are often established by companies to provide retirement plans for their employees. Every year, the company can contribute a certain percentage of each employee’s eligible pay into his or her individual Traditional IRA. Any company, whether a corporation, partnership or a self-employed individual, may establish a SEP even if there are no other employees.
Every dollar deposited under an eligible SEP plan within the limits listed in the table below qualifies as
a tax deduction.
|Tax Year||SEP Plan Employer Contributions|
|2020||The lesser of 25% of the first $285,000 of each eligible employee’s compensation or $57,000|
|2021||The lesser of 25% of the first $290,000 of each eligible employee’s compensation or $58,000|
|2022||The lesser of 25% of the first $305,000 of each eligible employee’s compensation or $61,000|
|Contribution Deadline||Employer’s income tax return filing due date, plus extensions|
For detailed information about SEP and employee eligibility, refer to IRS publication 560, Retirement Plans for Small Businesses, found on the IRS website.
As a business owner, you should consult with your tax or legal professional to review IRS eligibility requirements for this plan for your business.
The earlier you start saving for retirement, the more time your money has the potential to grow. It pays to start savings now and to contribute regularly.
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