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Form 5304-SIMPLE online San Antonio Texas: What You Should Know
The employer's name and address. The number of employees who are eligible to participate in the plan. The amount of compensation that qualifies the employees to participate in the plan. (This amount must not be less than 1% of employees compensation) Forms 5304 and 5305 are electronically filed with the IRS; the forms are mailed back to the employer. Both forms allow employers to deduct contributions made to the SIMPLE IRA Plan for all eligible employees on a monthly basis. An employer may make contributions to the SIMPLE IRA Plan for each employee according to a simple formula; the salary reduction or incentive match contributions must be made to the SIMPLE IRA Plan on a monthly basis according to the simple formula in the following order: Salary reduction contribution — 0.6% of compensation. The incentive matching contribution –1.6% of compensation. The percentage of salary reduction is determined by formula, as specified in section 5304(c)(1)(ii)(A)(2). Form 5304 must be completed and signed by the employer in full view of any prospective employer. A copy of the completed Form 5304 may be filed, notarized upon its completion, and sworn to before any federal authority authorizing the employer to carry out the SIMPLE IRA Plan. Form 5305 simplifies the SIMPLE IRA Plan by requiring that the employee's contribution be made solely for the purpose of purchasing an annuity. Form 5305 contains the same information as the SIMPLE IRA Plan but has been changed to provide that the employer must not deduct any contribution from the employee's annual salary with respect to an amount over 600 for the 2023 plan year (because that amount exceeds the applicable dollar limit for an employee in 2012, that employee must use the amount by which the eligible salary reduction for the year exceeds the limit). For more information about IRS SIMPLE 401(k)s, please review this previous blog post: SIMPLE 401(k)s Reviewed — IRS See also this previous blog post: SIMPLE IRA Planning for small businesses & more for an overview of the Tax Treatment of SIMPLE IRA Plans.
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