Per Diem Rates from the U.S. General Services Administration

Search by city, state or ZIP code, or by clicking on the map. You can also use the new per diem tool to calculate trip allowances

Rates are set by fiscal year, effective October 1 each year. Find current rates in the continental United States ("CONUS Rates").

Per Diem Rates

18 Things to Know About SEP Plans

---

1. Employer Established

A SEP (Simplified Employee Pension) is an employer-established plan and contributions are made by the employer to his or her own SEP-IRA account and to each employee's SEP-IRA account. Employees cannot set up their own SEP or make contributions to their own SEP-IRA account.

A SEP-IRA account is a traditional IRA and follows the same investment, distribution, and rollover rules as traditional IRAs.

2. Written Arrangement

A SEP is a written arrangement. It provides a simple, tax favored way for you to provide for your own retirement and to help employees save for theirs.

3. Self-Employed Persons

If you're self-employed, you can set up a SEP-IRA for yourself and make tax deductible contributions towards your own retirement.

Contributions to a SEP-IRA and its earnings are tax-deferred until distributed.

4. IRA-Based

Because SEP IRAs are IRA-based, they are simpler and less expensive to set up and administer than qualified plans, such as 401(k) plans, which involve more complex rules.

5. Control

A SEP-IRA is owned and controlled by the employee.

Keep in mind, normally, for income tax purposes, a self-employed person is not considered an employee of his or her business. However, for retirement plan purposes, a sole proprietor is treated as his or her own employer and partners are treated as employees of the partnership entity.

6. Reporting Requirements

There are no annual reporting requirements for a SEP.

7. Vesting

Contributions by the employer for plan participants are immediately 100% vested for each plan participant (the money belongs to them).

8. Corporations

Corporations can also use SEPs.

9. Form W-2 reporting for SEP-IRA contributions

SEP-IRA contributions are not included in an employee's gross compensation on Form W-2 (e.g., wages, salary, bonuses, tips, commissions).

SEP-IRA contributions are not subject to:

• Federal income taxes, or
• Social security and Medicare taxes

10. FUTA Tax

SEP-IRA contributions are not subject to FUTA tax.

11. Additional taxes are imposed for the following

• Making excess contributions
• Making early withdrawals
• Not making required withdrawals (e.g., like any traditional IRA, you must start receiving distributions at age 70 1/2).

12. Who can participate in a sep plan?

Self-employed individuals and eligible employees may participate in a SEP plan.

An eligible employee must meet three requirements:

• Has reached age 21
• Has worked for you in at least 3 of the last 5 years.
• Has received at least $550 in compensation from you for tax year 2012.

13. Setting up a sep plan and SEP-IRA accounts

Three basic steps in setting up a SEP:

• Execute a formal written agreement.
  • IRS Form 5305-SEP can be used to establish a SEP plan.
  • You do not file Form 5305-SEP with the IRS; you keep it for your own records.
• Give certain information about the SEP to each eligible employee.
• Set up traditional SEP-IRA accounts for each plan participant.
  • A SEP-IRA must be a traditional IRA; it may not be designated as a Roth IRA.

14. Timing Deductible Contributions

You can set up a SEP and make deductible contributions as late as the due date of your return plus extensions.

15. Contributions

• Self-Employed:
  • You make plan contributions into your own SEP-IRA account.
• Employees:
  • The employer makes contributions directly into each plan participant's SEP-IRA account at the financial institution where the SEP-IRA account is maintained
  • You, as the employer, do not withhold any money from an employee's pay to make plan contributions unless the SEP is a pre-1997 salary reduction simplified employee plan or a SIMPLE plan.
  • Employees are not permitted to make contributions to their own SEP-IRA. Only the employer may make SEP-IRA contributions.
• Contributions must be in the form of money (cash, check, or money order).
  • An employer cannot make contributions on the condition that any part of them must be kept in the employee's SEP-IRA account.
  • Contributions to am employee's SEP-IRA belong to the employee with no strings attached.

16. How to deduct contributions

• Employees:
  • Contributions for common-law employees are an allowable business deduction and are deducted directly from business income.
  • For example, a sole proprietor deducts contributions made for employees on Schedule C
• Self-employed persons:
  • Contributions for yourself (if you're self-employed) are deducted on Form 1040, line 28 in arriving at adjusted gross income (AGI).
  • A special computation must be made to figure your own deduction.

17. Distributions, rollovers, withdrawals

As an employer, you cannot prohibit distributions from a SEP-IRA. Generally, you can withdraw funds anytime. However, they will be subject to income taxes.

Distributions from a SEP-IRA are subject to IRA rules (e.g., early withdrawals before 59 1/2 are subject to a 10% penalty-with certain exceptions), including tax treatment of:

• Distributions
• Rollovers
• Required distributions, and
• income tax withholding

18. Borrowing From a SEP

There are several prohibited transactions; borrowing from a SEP is one of them because it is considered an improper use of SEP-IRA funds.

There are consequences for engaging in prohibited transactions.

• If an employee engages in a prohibited transaction the SEP-IRA will no longer qualify as an IRA.
• If a SEP-IRA is disqualified because of a prohibited transaction, the assets in the account will be treated as having been distributed to the employee on the first day of the year in which the transaction occurred.
• The employee must include in income the fair market value of the assets (on the first day of the year) that is more than any cost basis in the account.
• The employee may have to pay the additional tax for making an early withdrawal (10% of the amount withdrawn) if under age 59 1/2.