Are Simplified Employee Pensions tax deductible ?

With a Simplified Employee Pension you can contribute and deduct more than is allowed under the IRA rules. Contributions are based on a written allocation formula. Contributions cannot be discriminatory in favor of the owner(s) or management and must be made for employees.

In 2006, if you are self-employed, tax deductible contributions to your personal Simplified Employee Pension may not exceed 25% of your net earnings, or $44,000. Net earnings are reduced by your self employment tax deduction.

The deadline for establishing and contributing to an Simplified Employee Pension is the due date or your tax return, including extensions.

Related tax information about Simplified Employee Pensions

Tax Directory Topics:
IRAs
Roth IRAs
SIMPLE IRAs
Keogh Plans
Are IRA rollovers taxable on my tax return?
Adjustments to Income

IRS publications about Simplified Employee Pensions:
For additional information, refer to Tax Topic 451, IRAs, or IRS Publication 590,

Individual Retirement Arrangements (IRAs). For further education information refer to IRS Publication 970, Tax Benefits for Higher Education; IRS Publication 508, Educational Expenses; IRS Publication 1577,

Applying for Educational Financial Aid; and IRS Publication 520,

Scholarships and Fellowships. Also see IRS Publication 17,

Your Federal Income Tax. Please read this IMPORTANT Editor's Note regarding navigating IRS publications with Adobe Acrobat Reader.
IRS publications can also be ordered by calling 1-800-829-3676.

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