Publication 560 (2023): Retirement Plans for Small Business

Publication 560, also known as "Retirement Plans for Small Business," is a resource provided by the Internal Revenue Service (IRS) that guides small business owners on establishing and managing retirement plans for themselves and their employees.

What is Publication 560?

Publication 560 is your guide to establishing and managing retirement plans for your small business. It outlines three main types of plans and their benefits, contribution limits, and filing requirements.

Types of Plans Covered in Publication 560

A. SEP IRA (Simplified Employee Pension Individual Retirement Account): Easy to set up and administer, ideal for businesses with few employees. Allows employer contributions only.

B. SIMPLE IRA (Savings Incentive Match Plan for Employees): Another simple option with employer matching contributions required.

C. Qualified Plans (including 401(k) plans): Offer more flexibility and features but involve complex setup and administration.

Key Information for Each Plan:

  1. Eligibility: Requirements for participating employees and businesses.
  2. Contribution Limits: The maximum amount employers and employees can contribute each year, including details on catch-up contributions for older individuals.
  3. Tax Advantages: How contributions and earnings benefit from tax deductions and deferrals.
  4. Establishing and Maintaining the Plan: Steps involved in setting up your chosen plan and meeting ongoing IRS requirements.

For the current year's Publication 560, click here.