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SIMPLE, SEP, and SARSEP Answer Book,  2019  Edition by Denise Appleby Appleby Retirement Consulting Inc. , Gary S. Lesser GSL Galactic Publishing, LLC SIMPLE, SEP, and SARSEP Answer Book,  2019  Edition by Denise Appleby Appleby Retirement Consulting Inc. , Gary S. Lesser GSL Galactic Publishing, LLC

SIMPLE, SEP, and SARSEP Answer Book, 2019 Edition

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SIMPLE, SEP, and SARSEP Answer Book is the most comprehensive, up-to-the-minute, and authoritative resource on the market, answering the complex questions surrounding SIMPLEs, SEPs, and SARSEPs. The question-and-answer format, with its breadth of coverage and its plain-language explanations, provides practitioners with clear, concise answers to hundreds of practical questions. Practice pointers and numerous examples offer additional insight into the complexities of designing, administering, and reporting SIMPLEs, SEPs, and SARSEPs. Citations to authorities are provided as research aids for those who need to pursue particular subjects in greater detail.

Designing plans that best meet a specific company’s unique requirements is a difficult task. SIMPLE, SEP, and SARSEP Answer Book offers practitioners in-depth understanding of such issues as:

  • Establishing, maintaining, and terminating the plan
  • Employer and employee eligibility
  • Catch-up contributions
  • SEP integration with Social Security contributions
  • The operation and administration of SIMPLEs and SEPs
  • And much more!

Among the many other key areas covered are the meaning of the terms compensation and earned income for various purposes, IRS reporting requirements, participant disclosures, ERISA fiduciary requirements, and earnings from self-employment.

Additionally, SIMPLE, SEP, and SARSEP Answer Book includes these helpful tools and resources:

  • Guidance on appropriate codes to enter on Form 1099-R when reporting revocations of contributions and CIP failure to SEPs, SIMPLEs, and salary reduction SEPs (SARSEPs)
  • Extracts from the Employee Plans Compliance Resolution System applicable to SEP and SIMPLE IRA plans
  • Updated charts comparing various types of plans and plan features
  • COLA adjusted limits
  • Excess SEP/SARSEP contribution flow chart
  • And more!

Note: Online subscriptions are for three-month periods.

Previous Edition: SIMPLE, SEP, and SARSEP Answer Book, Twenty-Fourth Edition, ISBN  9781543803471¿

Pages 1126
Last Updated 06/14/2019
Update Frequency Annually
Product Line Wolters Kluwer Legal & Regulatory U.S.
ISBN 9781543813258
SKU 10044807-0004
Publish Frequency Annually
Product Line Wolters Kluwer Legal & Regulatory U.S.
SKU 000000000010048430
Table of Contents

1. Overview: SEPs and SARSEPs

  • Highly Compensated Employees
  • Establishment
  • Termination
  • Qualified Status
  • Compliance
  • Pros and Cons
  • Legislation

2. SEP Establishment and Employer Qualification

  • Establishing SEPs
  • Establishing SARSEPs
  • SEP Establishment Dates
  • Employee Eligibility
  • Employees of Limited Liability Partnerships and Limited Liability Companies
  • Forcing Employees to Participate
  • Classification of Employees
  • Employees of Predecessor Employers
  • Repeal and Grandfathering of SARSEPs
  • Examination Guidelines

3. SEP and SARSEP Documents

  • Model SEP and SARSEP Plan Documents
  • Prototype Document Approval
  • Individually Designed SEPs
  • Approval for Combined Plans and Prior Plans

4. ERISA Considerations and Related Laws

  • Alternative Reporting Methods
  • Disclosure Requirements When Using Form 5305-SEP
  • Disclosure Requirements When Not Using Form 5305-SEP
  • Prohibited Transactions and Related Definitions
  • Exemptions for Investment Advice
  • Exemption for Transactions with Service Providers
  • Other Prohibited Transaction Exemptions
  • Payroll Deduction IRA
  • Use of Electronic Media
  • Forwarding Contributions
  • Federal Securities Laws
  • Option Securities and Margin Accounts
  • Impact of State and Local Laws
  • Automatic Rollover of Mandatory Distributions
  • Bonding
  • FDIC Coverage

5. Making Contributions and Taking Distributions: SEPs and SARSEPs

  • Making Contributions to SEPs and SARSEPs
  • SEPs with Other Plans and Annual IRAs
  • Distributions and Deemed Distributions
  • Excess Contributions
  • Traditional IRA Excess Reporting Requirements

6. Compensation for SEPs and SARSEPs

  • Defining Compensation
  • Compensation Limits
  • Multiemployer and Multiple-Employer Plans

7. Special Rules for Self-Employed Individuals

  • Earned Income as Compensation
  • Calculating Earned Income
  • Self-Employment Tax
  • Earned Income: Where to Start
  • "Ultra Net" Earned Income
  • Interests in Multiple Entities

8. Top-Heavy Plans Benefiting Key Employees: SEPs and SARSEPs

  • Minimum Required Contribution
  • Key Employees
  • Determining Top-Heavy Status
  • Treatment of Various Plans

9. Integration of Contributions with Social Security

  • Allocating Integrated Contributions
  • Related Integration Rules
  • Disclosure Rules

10. Deduction of SEP Contributions by Employer

  • Conditions for Deduction
  • Fees and Commissions
  • Elective Salary Reduction Contributions
  • Affiliated Service Group Member
  • Deduction in Future Years
  • Penalty
  • Reporting

11. Taxation of SEP Contributions

  • Percentage Exclusion Limit
  • Dollar Exclusion Limit
  • Reporting
  • Overall Limit
  • FICA, FUTA, and Other Taxes

12. Elective SARSEP Deferrals

  • Elective Salary Reduction Deferrals
  • Excess Amounts Unique to SARSEPs
  • Excess Deferrals—Exceeding Deferral Dollar Limit
  • Excess SEP Contributions—Failing the 125 Percent Nondiscrimination Test
  • Disallowed Deferrals—Failing the 50 Percent Participation Rate Requirement
  • Catch-up Contributions

13. IRS Disclosure, Filings, Penalties, and Tax Withholding

  • Disclosure
  • Revocation Period
  • Reports to the IRS and the IRA Owner
  • Taxpayer Reporting
  • Withholding
  • Reporting Penalties
  • Reporting Form 5329 Penalties on Form 1040
  • Calculating and Reporting Nondeductible Contributions on Form 8606
  • Filing Information and Requirements
  • IRS Form 990-T
  • IRS Form 1040
  • IRS Form 1099-R
  • IRS Form 5329
  • IRS Form 5330
  • IRS Form 5498
  • Magnetic Media Filing Requirements
  • IRS Form 5500
  • IRS Form W-2
  • Other Filings and Registrations

14. SIMPLE IRA Arrangements

  • Basic Concepts
  • Establishing a SIMPLE IRA Plan
  • Prototype SIMPLE IRAs and SIMPLE IRA Plans
  • Employer Eligibility
  • Employee Eligibility
  • Compensation
  • Contributions
  • Employee Elections
  • Vesting Requirements
  • Employer Notification and Administrative Requirements
  • Trustee Administrative Requirements
  • Tax Treatment of SIMPLE IRAs
  • Designated Financial Institutions
  • Fiduciary Responsibility
  • Miscellaneous Rules
  • Remedial Correction Programs
  • Excess Contributions
  • Tax Credits

15. 401(k) SIMPLE Plans

  • Vesting Requirements
  • Employer Eligibility
  • Exclusive Plan Requirement
  • Employee Eligibility
  • Compensation
  • Contributions
  • Discrimination Testing
  • Tax Treatment of Contributions
  • Distributions
  • Rollovers and Transfers
  • Notice and Reporting Requirements
  • Adopting a 401(k) SIMPLE Plan
  • Excess Contributions and Plan Deficiencies
  • Termination in Favor of a SIMPLE IRA
  • Tax Credits

16. Beneficiary Designations

  • Making a Beneficiary Designation
  • Family Rights That Restrain a Beneficiary Designation
  • How Divorce Might Affect a Beneficiary Designation?
  • Other Events That Might Affect a Beneficiary Designation
  • Disclaimers
  • Giving Advice About Making a Beneficiary Designation
  • Common Mistakes

17. Correction Programs

  • IRS Correction Program
  • DOL Correction Program


  • SEP, SARSEP Deferral Form
  • Model Notification to Eligible Employees (SIMPLE IRA Plan)
  • Model Salary Reduction Agreement (SIMPLE IRA Plan)
  • Sample Summary Description (SIMPLE IRA Plan) ......... A-6
  • Sample Summary Description for Non-Designated Financial Institution (SIMPLE IRA Plan)
  • Notification of Excess SEP Contributions (HCE deferral percentage limitation exceeded)
  • Notification of Disallowed Deferrals (50 percent participation rate requirement not met)
  • Notification of Excess Deferrals ($17,500/$23,000 elective deferral limits exceeded)
  • Sample Return of Excess Form Request to Return Employer/Employee Contributions (For SIMPLE IRA Plans Under IRS EPCRS Procedure)
  • Alternative 1 (nonintegrated or model SEP)
  • Alternative 2 (integrated SEP, contribution expressed as a formula)
  • Revenue Procedure 2013-12
  • Comparison of 401(k) Plans and Grandfathered SEP/SARSEP Plans for 2013
  • Ten-Year Income Averaging Taxation
  • Employee Benefit Limits
  • Illustrations of Selected Examples
  • IRS Legal Memoranda, General Counsel Memorandum, and Private Letter Rulings
  • IRS Legal Memorandum
  • General Counsel Memorandum
  • Private Letter Rulings
  • DOL Adv. Opinion 2006-09A—Code Section 4975(c)(1)(A) & (B)
  • DOL Adv. Opinion 2006-01A—DOL Reg. Section 2509.75-2
  • DOL Adv. Opinion 2005-23A—ERISA Section 3(21)
  • DOL Opinion 82-3A—ERISA Section 110
  • Sample Request Form
  • Chart of Contribution Revocations and CIP Failures
  • Excess Elective SEP/SARSEP Contributions for 2013
  • 2013 Comparison Chart for SIMPLE in IRA Form Versus SIMPLE 401(k)
  • Comparison of Elective Deferral Plans for 2013
  • Participant Rollover Chart
  • Portability Options for Inherited Assets from Employer Plans, Traditional IRAs and Roth IRAs
  • Traditional/Roth IRA Eligibility for 2013
  • Internal Revenue Code Sections
  • Treasury Regulations Sections
  • ERISA Sections
  • Revenue Procedures and Revenue Rulings
  • IRS Notices, Announcements, and Letter Rulings
  • Department of Labor Regulations and Advisory Opinions
  • Code of Federal Regulations
  • United States Code
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