Retirement Plans: Retirement Plans (SEP, SIMPLE, Solo 401k)
Quick answer
Small businesses commonly use SEP IRAs under IRC §408(k), funded by employer contributions; SIMPLE IRAs under §408(p), which combine employee deferrals with required employer contributions; and solo 401(k) plans allowing both deferrals and employer contributions. For a self-employed owner, the contribution base is net self-employment earnings reduced by one-half of self-employment tax.
Retirement Plans (SEP, SIMPLE, Solo 401k) is tested on EA Exam Part 2 (Individual Taxpayer Issues). Primary IRS reference: IRS Publication 560.
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About this EA exam topic
Small-business retirement-plan questions test SEP IRAs, SIMPLE IRAs, and solo 401(k) plans: contribution limits, deadlines, and which plan fits which situation.
The EA exam tests the contribution-calculation basics for the self-employed and the differences in employer/employee contributions across plan types.
What you'll be tested on
- SEP, SIMPLE, and solo 401(k) contribution limits
- Self-employed contribution computation
- Establishment and funding deadlines
- Choosing among plan types
How to prepare
- Compare the three plans side by side on limits and deadlines.
- Remember the self-employed contribution base is net SE earnings less half SE tax.
- Know which plans allow employee deferrals.
Practice questions for Retirement Plans (SEP, SIMPLE, Solo 401k)
What this topic covers
Retirement Plans (SEP, SIMPLE, Solo 401k) appears in Part 2: Business Taxation within the Individual Taxpayer Issues domain. VantageEA practice questions focus on how retirement plans rules are applied in realistic EA exam fact patterns.
What candidates practice
Candidates practice identifying tested facts, choosing the best multiple-choice answer, and reviewing explanations tied to IRS Publication 560, IRC §408(k), IRC §408(p). This topic supports timed 100-question PSI-style mock tests and shorter topic review sessions.
Related practice-question themes include sep-ira, simple-ira, solo-401k, retirement.
Topic overview
Official IRS sources
Related keywords
Frequently asked questions
Which retirement plans suit a small business?
SEP IRA, SIMPLE IRA, and solo 401(k); each has different limits, deadlines, and contribution rules.
Which part?
Part 2 (Businesses).
Reference?
IRS Publication 560.
Continue studying
More Individual Taxpayer Issues topics from Part 2
Sole Proprietorship: Sole Proprietorship / Schedule C
Business Entities
Estimated Tax: Estimated Tax for Self-Employed
Individual Taxpayer Issues
Health Insurance: Self-Employed Health Insurance Deduction
Individual Taxpayer Issues
Home Office & Vehicle: Home Office & Vehicle Expenses
Individual Taxpayer Issues
QBI Deduction: QBI Deduction (Section 199A)
Individual Taxpayer Issues
Self-Employment Tax: Self-Employment Tax (Schedule SE)
Individual Taxpayer Issues
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