The good news is that you only have to offer the SEP IRA to “eligible employees” and you can make employees “ineligible” if they haven't worked for you for 3 of the previous 5 years (see the IRS SEP IRA FAQs). A SEP-IRA must be established for each eligible employee. All contributions to the SEP must go to traditional IRAs, including buying physical Gold in an IRA. Employees are responsible for managing their investments in a SEP-IRA account. Employers receive a tax deduction for the contributions they make to each employee's SEP IRA account.
In addition, the company is not restricted to an annual contribution. Decisions about whether to contribute and to what extent may change each year. As an employer, you don't have to fund contributions every year. However, when you decide to make contributions, you must contribute not only to your own SEP IRA, but also to each eligible employee's SEP IRA.
A SEP-IRA account is a traditional IRA and follows the same investment, distribution and reinvestment rules as traditional IRAs. Because a SEP-IRA is a traditional IRA, you may be able to make regular, annual contributions to this IRA, instead of opening a separate IRA. SEP IRAs are treated like traditional IRAs for tax purposes and allow for the same investment options. If the SEP-IRA allows non-SEP contributions, you can make regular contributions to your IRA (including recovery contributions to the IRA if you are 50 or older), up to the annual maximum limit.
However, if you're allowed to make contributions to a traditional IRA to your SEP-IRA account, you may be able to make IRA contributions to get up to speed. Fundamentally, an SEP IRA can be considered a traditional IRA with the ability to receive contributions from the employer. Nancy can also make regular, annual contributions to her SEP IRA, if her SEP IRA allows it, or contribute to her Roth IRA at XYZ Investment Co.
