Account Type
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Qualification to make contributions
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Annual contribution limits
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Deductibility of contributions
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Taxation of distributions
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401(k)
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Cannot exclude employees who:
- Are 21 years old
- Have completed one year of eligibility service (1,000 hours)
- Service eligibility may be 2 years where plan provides for 100% vesting at start of participation
|
Employee Elections:
2009: $16,500
Total
contributions to the plan cannot exceed 100% of compensation or
$49,000, adjusted for inflation. Additional $5,500 catch-up
contribution available for individuals age 50 and over.
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Contributions made pre-tax
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All distributions are taxable
|
403(b) TSA
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Employee of a tax-exempt religious, charitable or educational organization is eligible
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Employee Elections:
2009: $16,500
Total
contributions to the plan cannot exceed 100% of compensation or
$49,000, adjusted for inflation. Additional $5,500 catch-up
contribution available for individuals age 50 and over.
|
Employee may be permitted to make nondeductible contributions
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All distributions are taxable
|
SEP – Employee
|
Cannot exclude employees who:
- Are 21 years old
- Are employed in 3 of last 5 plan years
- Earn at least $4500 in current year
|
Employee
can contribute up to 25% of employee’s pay or $49,000 (2009) as an
individual IRA contribution to the SEP Account in addition to the
employer’s SEP Contribution. Employer may contribute 25% of first
$235,000 of compensation up to a maximum of $49,000. Compensation limit
of $245,000 adjusted for inflation in $5,000 increments.
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Employee may be permitted to make nondeductible contributions
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All distributions are taxable
|
SEP – Self Employed
|
Anyone with self-employment income
|
Same as SEP (i.e. 25% of first $245,000 of trade or business income).
|
Employee may be permitted to make nondeductible contributions
|
All distributions are taxable
|
SIMPLE
|
Employers
with 100 or fewer employees and self-employed, who received $5,000 in
compensation in the preceding year. Once qualified, can exclude
employees who have earned less than $5,000 in any two preceding years
or expected to receive less than $5,000 in current year.
|
Employee: 2009: $11,500
Employer:
Required to make matching contributions of up to 3% of employee wages
or 2% of employee contributions with proper notification. Additional
$3,000 catch-up contributions available for individuals age 50 and over.
|
Contributions made pre-tax
|
All distributions are taxable
|
Defined Benefit
|
Cannot exclude employees who:
- Are 21 years old
- Have completed one year of eligibility service (1,000 hours)
Service eligibility may be 2 years where plan provides for 100% vesting at start of participation
|
Lesser of $195,000 (indexed for inflation) or 100% of average compensation during three highest earning years
|
Contributions made pre-tax
|
All distributions are taxable
|
Profit Sharing
|
Cannot exclude employees who:
- Are 21 years old
- Have completed one year of eligibility service (1,000 hours)
Service eligibility may be 2 years where plan provides for 100% vesting at start of participation
|
Contribution limit per employee: 100% of compensation up to $49,000.
Compensation limit: $245,000 (2009)
|
Employer’s
contributions are excluded from income. Contributions independent of
employer deducted same as regular IRA; deduction may be reduced because
covered by employer plan
|
All distributions are taxable
|
Money Purchase
|
Cannot exclude employees who:
- Are 21 years old
- Have completed one year of eligibility service (1,000 hours)
Service eligibility may be 2 years where plan provides for 100% vesting at start of participation
|
Contribution limit per employee: 100% of compensation up to $49,000.
Compensation limit: $245,000 (2009)
|
Limited to 20% of net self-employment earnings
|
All distributions are taxable
|