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# Simplified Employee Pension (SEP) IRA

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Small business owners can make tax-deductible contributions with this flexible plan that is easy to set up and maintain. If you have employees, you may be required to contribute for them as well.

A Simplified Employee Pension (SEP) plan may work well if you want a low-cost, easy-to-maintain retirement plan for you and your employees. Both SEP IRA and Traditional IRA contributions can be made to the same account, and you have the flexibility to change how much your business contributes from year to year.

Here are some details:

## Eligibility to Contribute

You can contribute at any age if you are self-employed or a small business owner.

## Maximum Annual Contribution

2024 tax year: As a small business owner you may be able to contribute up to 25% of your compensation or $69,000, whichever is less.

2025 tax year: As a small business owner you may be able to contribute up to 25% of your compensation or $70,000, whichever is less.

If you have employees, you may be required to contribute for them as well.

## Tax-Deductible Contributions

As a small business owner you can deduct your contributions for yourself and your employees from your company's federal taxable income. The individual traditional IRA contribution if made - may or may not be deductible depending on individual tax filing status and modified adjusted gross income.

## Taxation of Earnings and Withdrawals

Tax-deductible contributions and earnings are taxed as ordinary income when withdrawn.

## Types of Investments

- Stocks, bonds, mutual funds and Advisory Products available through a WF Advisors brokerage account.

## Minimum Initial Investment

Varies by investment option

## Withdrawal Penalties

10% IRS additional tax if withdrawn before age 59½ unless an exception applies.

Exceptions:

- Death
- Disability
- Medical expenses in excess of 10% of AGI
- Health insurance premiums if unemployed for 12 consecutive weeks
- Qualifying higher education expenses
- Qualifying first time home purchase ($10,000 lifetime limit)
- Substantially equal periodic payments made over life expectancy
- Qualified military reservist
- Involuntary IRS levies
- Conversion to a Roth IRA
- Up to $5,000 for qualified adoption / birth expenses

## Required Withdrawals

The age to start Required Minimum Distributions (RMDs) begins at age 73 (Does not affect participants who turned age 72 on or before 12/31/2022.)

## Deadline to Set Up and Fund

You may establish and fund up through the business' tax filing due date plus extensions.

## Commissions and Fees

Vary by account and investment option

## Interested in learning more about SEP IRA plans?

Call us at 1-877-493-4727

## Make your money work

Earn more with a Business Market Rate Savings account (Member FDIC)

Learn More

Investment and Insurance Products are:

- Not Insured by the FDIC or Any Federal Government Agency
- Not a Deposit or Other Obligation of, or Guaranteed by, the Bank or Any Bank Affiliate
- Subject to Investment Risks, Including Possible Loss of the Principal Amount Invested

Investment products and services are offered through WF Advisors, a trade name used by WF Clearing Services, LLC and WF Advisors Financial Network, LLC, separate registered broker-dealers and non-bank affiliates of WF & Company.

WF and Company and its Affiliates do not provide tax or legal advice. This communication cannot be relied upon to avoid tax penalties. Please consult your tax and legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your tax return is filed.

WellsTrade® and Intuitive Investor® accounts are offered through WFCS.

Information published by WF Bank, N.A., WF Advisors, or one of its affiliates as part of this website is published in the United States and is intended only for persons in the United States.

WF Bank, N.A. is a bank affiliate of WF & Company.

PM-08072026-7617474.1.1

LRC-0225

## Compare our plans

Get a side-by-side comparison of our business retirement plans.

## More resources

- Expand Employee Benefits

## Simplify Your Retirement Investing

Merging smart technology with human guidance as needed, for a low-cost investment account.

Explore an Intuitive Investor® Account

## Still have questions?

### Call Us

WF Advisors

Brokerage Accounts

1-877-493-4727

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