Personal Taxes

Savings Incentive Plan for Employees (SIMPLE IRA), like the SEP IRA, work just like a Traditional IRA with the only important difference being the contribution limits. For SIMPLE IRA’s the limits for an employee are equal to 100% of your net earnings up to $15,500 or $18,500 if you’re over 50, plus an employer contribution of 3% of your net earnings from self-employment. For SIMPLE IRA purposes your net earnings from self-employment are your revenues minus your expenses multiplied by .9235. The .9235 accounts for your deductions for one half of your self-employment tax.