Simple accounts

Savings Incentive Match Plan for Employees (SIMPLE) accounts, created by the 1996 Small Business Job Protection Act, are a new tax-favored retirement product that many banks may begin to offer their customers. The purpose of the new legislation is to create an easy retirement savings vehicle that wi...

Full description

Saved in:
Bibliographic Details
Published in:ABA bank compliance 1997-07, Vol.18 (7), p.3
Main Author: Riedlinger, Cheryl S
Format: Magazinearticle
Language:English
Subjects:
Banking law
Banks
Contributions
Cost control
Employees
Employers
Financial institutions
Fines & penalties
Individual retirement accounts
International banking
IRA
Planning
Profit sharing plans
Retirement plans
SIMPLE retirement plans
Small business
Tax benefits
Taxation
Trustees
Wages & salaries
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Savings Incentive Match Plan for Employees (SIMPLE) accounts, created by the 1996 Small Business Job Protection Act, are a new tax-favored retirement product that many banks may begin to offer their customers. The purpose of the new legislation is to create an easy retirement savings vehicle that will encourage small businesses to provide a retirement plan for their employees without the complexities and filing requirements of other plans. SIMPLE plans are not subject to "top heavy" or "nondiscrimination" rules that can limit the benefits to higher-paid employees. An employer can deduct its contributions to a SIMPLE account as long as the matching or nonelective contribution is made by the due date of its tax return. An employee is not taxed on contributions to a SIMPLE account; however, a 10% tax on early withdrawals applies, and a 25% tax applies to withdrawals made within the first 2 years.
ISSN:0887-0187
1930-3963