SEP IRAs

Individuals who are eligible to establish a SEP and have eligible employees establish SEP IRAs include:

• Sole proprietors
• Business owners in a partnership
• Those earning self-employment income by providing a service

The establishment deadline is the same as the federal income tax return filing deadline for any given year, usually April 15.

SEP contributions must be made by the employer.

• Contributions can vary each year (between 0%–25% of compensation up to $51,000 for 2013).
• Each eligible employee must receive the same percentage.

Employers may contribute until the business tax filing deadline for the year, including extensions.

Catch-up contributions are not allowed with the exception of IRAs that hold the SEP contributions if the SEP IRA documents allow.

Contributions are tax deferred to employees and tax deductible as a business expense.

• Savings grow tax deferred.
• Income taxes are paid on withdrawals.

The distribution rules for SEP assets are similar to those of a Traditional IRA.

• SEP owner must be over 59½, disabled, deceased or a first-time home buyer.
• 10% early withdrawal penalty applies for withdrawals made before age 59½, subject to certain exceptions.
• Minimum required distributions start at age 70½.

These products are only a few of the retirement and investment solutions offered by BB&T Investment Services, Inc. For information on other products and solutions, please contact a BB&T Investment Services, Inc. Investment Counselor.

• Bonds
• Mutual funds
• Stocks
• Annuities
• Exchange Traded Funds (ETFs)