Which of the following is True concerning SEP IRAs?
A) SEP IRAs are difficult to set up and have high administrative costs.
B) Taxpayers may contribute unlimited amounts to SEP IRAs.
C) Employees of the taxpayer cannot be included in SEP IRAs.
D) Taxpayers with a SEP IRA must contribute for their employees.

Question

Quizplus · Accepted Answer

SEP IRAs allow employers to make contributions on behalf of employees, but it is not required. However, if an employer makes a contribution for themselves, they must also make contributions for eligible employees. Option A is incorrect as SEP IRAs are easy to set up and have low administrative costs. Option B is incorrect as the annual contribution limit for a SEP IRA is a percentage of the employee's compensation or a fixed dollar amount, whichever is less. Option C is incorrect as employees can be included in a SEP IRA as long as they meet certain eligibility requirements.

Which of the Following Is True Concerning SEP IRAs