SEP IRA Contributions for 2003 Can Still Be Made

Small business owners still have a chance to cut their 2003 taxes by contributing to a SEP-IRA before filing their business tax return.

Alexandria, Virginia (PRWEB) January 22, 2004 --Small business owners still have a chance to cut their 2003 taxes by contributing to a SEP-IRA before filing their business tax return. Employer contributions made to a Simplified Employee Pension-Individual Retirement Account, known as a SEP plan, are deductible for 2003, even if the SEP plan is opened and the contributions are made in 2004.

A SEP-IRA allows small business owners and sole proprietors to cut their tax liability by making retirement contributions for their eligible employees," says Daniel Lamaute, retirement specialist at InvestSafe.com, a retirement planning website for the self-employed.

The SEP-IRA has several advantages for employers", says Lamaute, Employers get a tax deduction, and the SEP-IRA contribution is not taxed as income to the employees. The earnings within the SEP IRA grow taxed deferred until the participant pulls the money out, usually at retirement."

For 2003, employers can contribute up to 25% or $40,000 of an employees wages, whichever is less to a SEP plan. The maximum contribution rises to $41,000 in 2004. The employer is required to contribute the same percentage amount for all eligible employees.

A SEP-IRA is an excellent choice for small business owners," says Lamaute It affords them a vehicle for their employees to save money for their retirement. Its hassle free, cheap and easy to set up."

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