John A. Weeks III wrote:

- quote -

Well, actually IRS Form 5805-SEP is the *only* form that
*has* to be filled out to establish a SEP plan. A
participant (that would be you <grin> ) would also need to
open an IRA to hold the SEP contribution, but that's also
something that I find some custodians complicate, while
others have no problem whatsoever with it.

What it sounds like to me is that the financial services
firm you decided to work with was a) using their own
document and b) were including additional questions in
setting up the account beyond what was required to establish
the SEP. Actually, there are more options available for a
SIMPLE, and the same brokerage firm would likely run you
through as many questions.

In reality, a SEP has less paperwork and is simpler to
administer than a SIMPLE. It probably would have helped had
your broker had some experience working with SEPs before,
since I suspect the fact that he was unsure of the
requirements actually added to the confusion.

--
Ed Zollars, CPA
Phoenix, Arizona

"John A. Weeks III" <john[at]johnweeks.com> wrote in message
news:040120041410217057%john[at]johnweeks.com...
- quote -

You still use a fax machine? And you're on the internet?

No need. I'm much faster and efficient.

http://www.irs.gov/pub/irs-pdf/f5305sep.pdf <---Pros keep this stuff
bookmarked, and downloaded.

If your broker had to get help filling this out, then he didn't have much
experience. I've filled out several hundred of them.

Virtually impossible to screw up, when you don't have any employees, and
EASY to amend, since its never filed with the Service.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

In article <CjXJb.3975$zf.3953[at]okepread05> , Brent D. Gardner, ChFC
<bgardner20[at]cox.net> wrote:

- quote -

I can fax to you the paperwork that I had to fill out if you desire.
Perhaps it has changed since I established my SEP. The paperwork
that I had to fill out had a number of very technical questions,
some of which my broker had to call his support group to learn
what they meant. Many of these questions related to the rules
and percentages that I would use to contribute for employees,
but I never intended to even have employees in this company. That
was far more than I needed to deal with just to set aside money
for myself. I would consider that to be messy for a single person
business.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

"Sandy Jones" <masteroflunar[at]aol.com> wrote in message
news:4c95472e.0401022328.15727976[at]posting.google.com...
- quote -

You can establish and fund a SEP up until you file your taxes, including
extensions, which makes this one of the most flexible retirement plans for
small businesses, especially for the sole proprietor who doesn't know how
much they will have from year to year.

You can invest in anything that an IRA can hold, such as:

Mutual funds
Stocks
Bonds
Certificates of Deposit
Annuities -- Fixed, Index Linked, and Variable

If your business remains profitable, you may want to consider a single
participant 401(k) & Profit Sharing Plan. The advantages include additional
creditor/predator protection, as well as the ability to borrow your own
money for an emergency or opportunity.

Beyond IRAs (SEP, SIMPLE, Traditional, Roth) and Defined Contribution
Qualified Plans (such as a 401(k) & Profit Sharing Plan), if your business
continues to grow and remain profitable, and you want to save even more on a
tax advantaged basis, a Defined Benefit Pension Plan is worth looking at.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

"John A. Weeks III" <john[at]johnweeks.com> wrote in message
news:030120040827272765%john[at]johnweeks.com...
- quote -

There is NO messy paperwork for a SEP -- that's just plain wrong. One form,
that you fill out, put in a file for your own records (NOT filed with the
IRS). Otherwise, the application is straightforward.

She can't do a SIMPLE IRA for 2003 -- it would have to have been established
three months ago.

Brent D. Gardner, ChFC
Chartered Financial Consultant
http://members.cox.net/brentdgardner1378/

"Be ever questioning. Ignorance is not bliss. It is oblivion. You don't go
to heaven if you die dumb. Become better informed. Learn from other's
mistakes. You could not live long enough to make them all yourself." - Hyman
George Rickover (1900-86), Admiral, US Navy, advocated development of
nuclear subs & ships

The Chartered Life Underwriter (CLU) and Chartered Financial Consultant
(ChFC), designations owned and exclusively offered by The American College,
signify the highest standards of academic study and professional excellence
in the financial services industry.

In article <4c95472e.0401022328.15727976[at]posting.google.com> , Sandy
Jones <masteroflunar[at]aol.com> wrote:

- quote -

Yes, a SEP plan would be ideal in this situation. There is some
messy paperwork involved in setting up a SEP plan. Some folks
choose to use the Simple plan instead. The Simple is much easier
to set up, but it has lower limits for what you can put away.
Best thing to do is see your financial planner or broker. Either
one can set you up. The best choice is at a company that offers
a wide variety of funds including no-load low-cost index funds
like the Vanguard family.

There is no need to do W-2 wages. With a sole propritorship,
you and the business are one in the same. You report your
business income and business expenses on Schedule C. If you
made a profit from this business activity, you can put a
percentage of it into the SEP or Simple. The remainder of
the profit is then added to your adjusted gross income on
the 1040. If you had shown a loss for the year, then that loss
would simply be subtracted from your adjusted gross income on
your 1040.

You are going to pay a lot of taxes on this money. Make sure
you take every possible legitimate expense item involved in
earning this money as a business deduction. This includes car
expense, mileage, books, magazines, postage, office supplies,
meals, travel, etc. Every dollar of expense you think of means
30 cents in your pocket.

Next, make the maximum SEP contribution you can. Due to the
tax effect, every dollar you put in results in a 30 cent rebate
from the IRS (due to not having to pay taxes on that money).

Finally, you most likely needed to pay quarterly tax estimates
on this money. If you didn't do that, you likely are going to
either get a fine, or have to pay penalties. As I recall, if
you pay all the quarterlies for the year by Jan 15, you may be
able to avoid a fine, and greatly reduce the penalty that you
might owe. See a good accountant ASAP on this -- with $100K
of 1099 income, making a mistake here could have a large dollar
consequence.

-john-

--
================================================== ==================
John A. Weeks III 952-432-2708 john[at]johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ==================

During this year, I made some money (mostly commissions from
companies) and I recieved a 1099-MISC form with about $100k in income.
Now I want to open a SEP for myself. Is this possible? I heard I have
to give myself wages (W2 form) in order to do this. But I am the only
person in my business and I hire no one else. Any advice would be
appreciated. Thank you.