Simple Ira Employer Agreement: Fill & Download for Free

Yes, you can. You may want to establish a separate IRA if you ever want to roll the money back into another employer’s 401(k) plan, but you don’t have to. The IRA that you have for the SEP is a regular IRA with respect to everything except the employer contributions.(And a SEP is not a SIMPLE IRA — two completely different things — although you could roll over to a SIMPLE as well, if the terms of the trust agreement permitted it.)

First, you need to clarify terminology.A "self-directed IRA" is not a type of IRA. It refers to any IRA under which you have the right to direct the investment of the assets yourself (as opposed to the investments being determined by some professional asset manager). Whether an IRA is "self-directed" has absolutely nothing to do with your question, and will have no effect upon whether or not you can open the IRA.A "simple IRA" refers to a type of employer-sponsored plan, known as a "Savings Incentive Match Plan for Employees" (or "SIMPLE"), that is funded by making contributions to employees' traditional IRAs. The contributions that are permitted under a SIMPLE are salary-reduction contributions by the employee (sort of like what is done in a 401(k) plan) up to $13,500 this year, plus an additional $3,000 if you're age 50+, and contributions by the employer -- either matching up to 3%, or a flat 2% of compensation for each employee. Is that what you're referring to as a "simple IRA"? (I'll assume that it is.)As you might have noticed, if you are in a SIMPLE, you already have a traditional IRA, and it may or may not be self-directed. So what you're really asking must be (1) whether you can open another IRA, and (2) whether you can contribute to that other IRA. (I'm ignoring the self-directed part, because, as I said, any IRA could be self-directed -- that simply depends upon what the particular IRA trust or custodial agreement allows.)(1) There is nothing that stops you from opening another IRA. Or five more IRAs. You can have as many IRAs as you want/need. The issue is getting money into them, as pointed out by Ben Rosenthal's response. He suggested rollovers, which may be the only way that you could do it.(2) The problem that you have, being a participant in a SIMPLE, is that you are subject to the "active participant" phaseout of the IRA deduction limit based on your adjusted gross income. For instance, if you are single, your IRA deduction amount is reduced if your AGI (with some specific modifications) is between $65-75,000, and is $0 if your AGI is over $75,000. If you are married filing a joint return, the phaseout range is $104-124,000.So, even though you could establish a new account, you may not be able to put any money into it. (Roth IRAs are not subject to the phaseout described in (2), but they have their own phaseout rules applicable to how much you are allowed to contribute.)

When you are launching a new company, staffing can be your greatest investment, and the decisions you make are likely to have a tremendous impact on the success of your start-up.Other venture-funded startups go into their launch plan with a list of key employees that they need on board to get things rolling.However, many entrepreneurs enter into their new venture without a clear human resources plan. Having a plan doesn’t just mean identifying key employees and decision-makers; that’s easy. It means having an HR strategy in place that is both compliant with the law, and is designed to attract and retain the talent you need to succeed.Before you sign on your first employee you have to have a plan in place. Can you differentiate between a contractor and an employee? Have you established protocols for payroll that are compliant with state and federal tax laws? Have you established general policies for your company that are consistent with your goals, core values, as well as with risk management “best practices”?And what about benefits? Medical insurance is becoming increasingly expensive and important to employees; they will also naturally start asking about things like a 401K plan. Many fledgling employers say to themselves “well, that benefit is a good thing to have so I guess I’ll add that” but the reality is that the old “standard benefits package” has become cost-prohibitive for many start-ups. For example, until your business reaches a certain size, implementing a 401K does not make fiscal sense. The 401K rules are complex, and costly to administer, and in most cases a simple IRA will lower fees and allow employees to put away up $11,500 and you can set it up with an employer match just like a 401K plan ,but without the administrative hassles.Before you write that first offer letter, you have to establish your benefit policies: Who is qualified to receive benefits and what should your benefits package look like? If you don’t have a benefits package in place at the outset – and most start-ups don’t – then how can you make a commitment as to what you will and won’t offer? If you over commit to your first employee, it can cost you a lot of money down the road as you grow bigger. If you under commit, it will be harder to attract premium talent. You also need to determine who is eligible for benefits. Do you want to include part-time employees at what are your policies around that scenario? How do you gauge eligibility? Will you pay benefits during the probation period? If you set the terms out in advance, then you won’t run into concerns or legal challenges later on.Now let’s consider how you want to calculate time off. Do you want to offer paid time off, sick time, paid holidays? What about accumulated vacation time? These trifles don’t seem to matter when you are just starting out, but failure to set a clear policy during the hiring process can lead to legal hassles when an employee leaves and wants to be paid for accumulated vacation time he or she may or may not deserve. You will also need to establish policies regarding medical disability leave, including maternity leave, since creating these “as they arise” can lead to sticky precedent-setting situations down the road. Other time off policies around bereavement and time off for voting should also be decided before you hire your first employee.Then there is the old 1099 versus W-2 trap. Many start-ups hire consultants rather than employees to fulfill key roles to save administrative overhead. After all, a salaried position can result in twice the cost of the actual paycheck when you add in taxes, benefits, and incidentals. So while hiring consultants on a 1099 rather than employees on a W-2 may look attractive, you have to make sure the consultants don’t appear to be full-time employees. Make sure you have contracts that clearly state they are not employees, and make sure your contractors can truly be classified that way according to the state and federal definitions. With the passage of the new health care bill, the definitions defining 1099 supporters are going to become more complex so you have to take extra steps to stay in compliance.Your best defense is to think through your staffing needs in advance, document those needs, and make sure you have protocols and procedures written out in employment contracts, letters of agreement, and employee manuals. Even if you haven’t developed all your HR materials in advance, having a written plan eliminates any guesswork. So if an employee comes to you looking for paid time off or a raise, you have a written protocol you can point to that covers all employees.A little pre-planning with the help of some HR professionals will save you a lot of time and money in the long run. Trying to retrofit policies to compensate for ill-conceived procedures is much harder than just doing it right from the outset.Hope you found an answer to your question.If you like reading this answer, please don't forget to follow our page, Metvy for reading more such answers on Business, Marketing and more value based content.Thank you for reading this :)Source : Start-Ups and Staffing: Better to Plan to Get It Right the First Time