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Expert advice needed
Old 01-29-2007, 05:43 PM   #1
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Expert advice needed

Hello I am a new member and this is my second post in 1 day. I own a rather small trucking company and I have 2 employees. All truck drivers are contract labor, as they own the trucks they drive. I am a S corp. I want to start putting money in a retirement account. I believe I am not eligible for Roth or a deductible traditional IRA due to income. I believe a simple ira is something but I really dont like or understand all the rules with employees. Also I like the idea of index funds would that be a good choice for a taxable account? I have been succesful at making money, just not very well educated at what to do with it after that. Please help. Thanksss
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Re: Expert advice needed
Old 01-30-2007, 12:32 AM   #2
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Re: Expert advice needed

Research SEPs (self employed pension). You can set aside as much as 15%, presumably subject to some limitations.

You really want to assure that your independent contractors are truly independent, least they be deemed employees at some later date. Some trucking businesses tip-toe on both sides of the line (so to speak).
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Re: Expert advice needed
Old 01-30-2007, 07:35 AM   #3
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Re: Expert advice needed

Quote:
Originally Posted by Brat
Research SEPs (self employed pension). You can set aside as much as 15%, presumably subject to some limitations.
SEP = Simplified Employee Pension

And it's 25%, not 15%
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Re: Expert advice needed
Old 01-30-2007, 10:53 AM   #4
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Re: Expert advice needed

Thanks for the correction. Even better than I recall.

DH had his own one-person pension plan in the 70s. After IRAs were developed his accountant recommended switching to a SEP because the opportunities to save were similar and administration much cheaper. A SEP was simplified our life so the image stuck in my brain. 15% was what the first tier of the old pension plan (although it did go to 25% - couldn't afford that).
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Re: Expert advice needed
Old 01-30-2007, 11:03 AM   #5
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Re: Expert advice needed

Welcome to the board, Kraft.

You know your business better than we do and each of these plans has advantages & drawbacks, so while those two are duking it out over their memorized versions of the tax code you can consult the IRS' versions:

SEP: http://www.irs.gov/pub/irs-pdf/p560.pdf
SIMPLE: http://www.irs.gov/pub/irs-pdf/p590.pdf (around page 65)
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