5304 simple-2025

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The document is Form 5304-SIMPLE, a model Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) that allows employers to establish a SIMPLE IRA plan under section 408(p) of the Internal Revenue Code. It outlines employee eligibility requirements, salary reduction agreements, contribution types (matching and nonelective), and administrative procedures for managing the plan. The form emphasizes that contributions are made to individual retirement accounts selected by employees and provides guidelines for employer responsibilities regarding notifications and contributions.

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Click 'Get Form' to open it in the editor.
Begin by filling out Article I, which outlines employee eligibility. Select either 'Full Eligibility' or 'Limited Eligibility' and provide the necessary compensation amounts.
In Article II, complete the salary reduction agreements. Specify the percentage or dollar amount for salary reductions and indicate any timing options for elections.
Proceed to Article III to detail contributions. Indicate whether you will make matching contributions or nonelective contributions, and fill in any required compensation limits.
Review Articles IV through VII for additional requirements and provisions, ensuring all necessary fields are completed accurately.
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Versions	Form popularity	Fillable & printable
2012	4.9 Satisfied (332 Votes)
2008	4.2 Satisfied (26 Votes)
2002	4 Satisfied (26 Votes)

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What is the purpose of a SIMPLE IRA?

A SIMPLE IRA plan provides small employers with a simplified method to contribute toward their employees and their own retirement savings. Employees may choose to make salary reduction contributions and the employer is required to make either matching or nonelective contributions.

What are the disadvantages of a SIMPLE IRA?

Are There Downsides to SIMPLE IRAs and SEPs? Employee limitations. SIMPLE IRAs can only be implemented at companies with 100 or fewer employees. Total annual contribution limits. Lower contribution limits than a 401(k). Mandatory employer contributions. No loans or Roth contributions.

Is the SIMPLE IRA 2% or 3%?

The most employees can contribute to SIMPLE IRAs in 2024 is $16,000, with an additional $3,500 catch-up contribution for those age 50 and older. Employers may contribute either a flat 2% of your pay, regardless of whether you contribute, or match dollar-for-dollar what you contribute, up to 3% of your pay.

What is the difference between SIMPLE IRA 5305 and 5304?

Form 5305 means the entire plan and all participant SIMPLE IRAs are established at one institution, whereas Form 5304 allows the accounts to be established at different institutions. A SIMPLE IRA must be established between January 1 and October 1 of the calendar year.

Do all employees have to participate in a SIMPLE IRA?

You must set up a SIMPLE IRA for each employee with contributions under the plan. Employees must receive notice of their right to participate, to make salary reduction contributions, and to receive employer contributions.

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What are the SIMPLE IRA changes for 2024?

The amount an employee contributes from their salary to a SIMPLE IRA cannot exceed $16,000 in 2024 ($15,500 in 2023; $14,000 in 2022; $13,500 in 2020 and 2021; $13,000 in 2019 and $12,500 in 2015 2018).

What is the difference between SIMPLE IRA 5304 and 5305?

Use Form 5304-SIMPLE if you allow each plan participant to select the financial institution for receiving his or her SIMPLE IRA plan contributions. Use Form 5305-SIMPLE if you will deposit all SIMPLE IRA plan contributions at an employer-designated financial institution.

What is a 5304 simple form for?

Use Form 5304-SIMPLE if you permit plan participants to select the financial institution to receive their SIMPLE IRA plan contributions. Use Form 5305-SIMPLE if you require all contributions under the SIMPLE IRA plan to be initially deposited at a financial institution you designate.