Whether your business offers an SEP IRA, SIMPLE IRA or self-directed IRA to its employees, you should understand how IRA distribution within your company can be adjusted to meet your specific needs, enrich the employee-employer relationship, and provide tax credits for expenses rendered in the process.

While offering an IRA leads to better employee satisfaction, your business can also benefit from IRA distribution. Consider the following list to make the most of the benefits entitled to your business by providing IRA plans:

1. Create an IRA investment account that operate on a fiscal-year basis instead of a colander-year basis.

2. Learn how to receive tax deductions for business expenses relating to IRA distribution.

3. Gain a better understanding of your responsibility to employees when dealing with IRA transfers or rollovers.

Action Steps
The best contacts and resources to help you get it done

Use non-IRS forms to set up employee IRA plans

Setting up an employee's IRA account using non-IRA forms permits your business to opt for a fiscal-year plan instead of the calendar-year plan required when using IRS forms. All IRA providers offer IRS-equivalent forms you may fill out to set up an SEP IRA retirement plan to operate on a fiscal year.

I recommend: T. Rowe Price can assist your business in setting up an employee's IRA plan. The company operates its services using the fiscal year format, and you can download appropriate forms from their website prior to obtaining the company's services. Also find IRA setup resources available at Charles Schwab Corporate Services.

Receive tax deductions for business expenses incurred setting up SEP IRA accounts

Following implementation of individual retirement accounts at your business, you may be able to claim a tax credit for part of the ordinary and necessary costs of starting up SEP IRA accounts. Obtain IRA information online to see if your SEP contributions are tax deductible business expenses. If so, print out and complete the appropriate IRS forms.

I recommend: Check out an article at NuWire Investor to gain a better understanding of tax deductions your business may qualify for as an IRA retirement plan provider. Download and complete Form 8881 provided by the Internal Revenue Service to receive any tax deductions to which you are entitled.

Understand your responsibility as a business owner when dealing with a rollover IRA or transfer

Take into account your responsibility as an employer to become responsible for a new employee's IRA investments. You may also find it to be beneficial to learn appropriate exit strategies to ensure you cut any loses but keep employees satisfied.

I recommend: Take a look at Research401k.com to understand the difference between rollover IRAs and IRA transfers. You can also purchase a DVD from Crescendo Interactive highlighting exit strategies for business owners dealing with IRA rollovers.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Always seek advice from the IRS or your tax advisor if you are unsure about IRA investment accounts guidelines, rules and problems.

Employees who have 401k plans might wonder why they should worry about an Individual Retirement Account. It's simple: You can never save too much for retirement. An Individual Retirement Account is a saving plan that offers tax-advantaged growth. Some workers, however, delay participation because of confusion over the many IRA plans, such as a rollover account when you change jobs.

You can maximize your Individual Retirement Account savings, at and outside of work, with a simple three-part plan:

1. Examine the variety of IRA plans to find those that fit your overall retirement strategy.
2. Discuss Roth IRAs and 401k plans with your financial planner and workplace benefits representative before making any move.
3. Don't delay investing in an Individual Retirement Account. The earlier you start saving, the more money you'll have to enjoy retirement.

Action Steps
The best contacts and resources to help you get it done

Choose IRA plans based on your overall finances

Picking the appropriate IRA plan depends on where you are now financially. Examine your current savings vehicles as part of a comprehensive retirement plan. Then take the appropriate next steps to maximize your retirement investments.

I recommend: The Financial Industry Regulatory Authority (FINRA) offers a comprehensive online calculator to help you plan your investing strategy. Scottrade also offers a variety of online planning tools and calculators to assess where you are and which IRA plans will get you where you want to be.

Roth IRAs vs. traditional IRA plans

Your choice of Roth IRAs or traditional IRA plans depends on your personal circumstances, but Roth IRAs are increasingly popular because their eventual distributions are tax free. Traditional IRA plans still appeal to some, though, because they offer an immediate tax deduction.

I recommend: Download IRS Publication 590 and take a look at page 5, which includes a chart that shows the differences between Roth IRAs and traditional IRA plans. State Farm offers a table that compares both types of IRA accounts. Many financial services companies also offer comparisons of traditional IRA plans and Roth IRAs. Scottrade, Fidelity, T. Rowe Price and Charles Schwab & Co. all offer various IRA plans and rollover options.

Keep 401k plans working for you

Employers help you reach your retirement goals via company-sponsored 401k plans. But when you leave a job, don't leave your retirement money. Take control of your company savings via a 401k rollover account. If your new job offers such plans, transfer your account to the new company. If that's not an option, move money from 401k plans into an IRA rollover account.

I recommend: Job search site Monster has an online 401k rollover evaluator to help you decide which move to make.

After age 50, beef up contributions to IRA accounts

Age has its benefits when it comes to retirement savings. If you're age 50 or older, you can 'catch up' by contributing an additional $1,000 to IRA accounts and 401k plans. Catch-up contributions are possible for all types of retirement savings vehicles, not just 401k plans, but each has special rules that must be followed.

I recommend: The 401k Help Center answers the most common questions about catch-up contributions. USAA offers more resources and tips for your IRA accounts. AARP Financial offers a free five-minute IRA checkup to determine if your IRA plans are working hard enough for you and if you’re investing the right amount.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  It's usually not wise to leave 401k plans with a former employer. Many plan administrators charge fees to manage your money, regardless of whether you're still with the company or a former employee.
• •  Carefully weigh whether the immediate tax break of traditional IRA plans is more important than the advantages of tax-free Roth IRAs.
• •  You may put your 401k rollover amount into existing traditional IRA accounts. However, keeping your 401k rollover money separate simplifies tax recordkeeping.
• •  Ensure any retirement account transfers are direct between old and new employers or via an IRA rollover. If you take direct possession of the money, you'll likely face early distributions penalties as well as owe any potential federal tax on the money.

Set up individual retirement accounts (IRAs) to lure and retain quality employees. This provides you with a successful business tool as providing an IRA retirement plan to employees demonstrates your business's financial security as well as a sense of individual security to employees and their families. In most cases, offering an adequate IRA leads to satisfied employees.

Some IRA plans are easier for businesses to manage and contribute to than others, so become informed about IRA plans basics to make sure you are getting the most out of your time and resources. You may, however, want to obtain the services of IRA providers that specialize in IRA distribution. Consider the following IRA-funded retirement options for your employees:

1. SEP IRA: Easy to set up and maintain; does not require annual tax return.

2. SIMPLE IRA: Requires little documentation and no annual tax filing.

3. Payroll Deduction IRA: Simplest of all retirement options; employee authorizes payroll deductions for contributions.

Action Steps
The best contacts and resources to help you get it done

Gain a better understanding of SEP IRA plans

Providing employees with SEP individual retirement accounts is beneficial for businesses with a small staff that have the ability to wholly fund IRA accounts. Employer contributions are optional, however, so an employee's IRA investments are dependent upon the financial abilities of their employer. While this may not be satisfactory to staff, it enables employers to have some leeway when facing cash flow problems.

I recommend: Obtain a CD-ROM with SEP IRA information and background on other IRA plans from the Internal Revenue Service to learn about the ins and outs of offering this easy and low-cost retirement plan. Beacon Capital Management provides business owners with answers to important SEP IRA plan questions.

Learn about SIMPLE individual retirement accounts

Offering employees SIMPLE individual investment accounts is best for businesses that have reliable and positive earnings. Both employers and their employees contribute to simple IRA accounts so decreases in cash flow can be problematic. An employer may decrease their contributions if necessary, but cannot stop investing in an employee's IRA account.

I recommend: Visit the Department of Labor resources page and scroll down to the For Small Employers section to download resources on IRAs, including a guide to SIMPLE IRA plans. Access planning tools and view examples of SIMPLE IRAs at the CCH Financial Planning Toolkit.

Understand how employees can benefit from payroll deduction IRA plans

Allowing employees to choose payroll deduction IRA investment accounts is beneficial to businesses that do not want to contribute to an employee's retirement. A payroll deduction IRA is a an employee self-directed IRA and is based solely on an employee's designated contributions. An employer is not required to provide additional contributions in this situation.

I recommend: Visit Associated Industries of Vermont and scroll down to the Human Resources and Workplace Safety section to download a concise guide to setting up and implementing payroll deduction IRAs from Carney Antell. Read a USA Today article highlighting business owners' increasing preference for offering these retirement plans.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Always check with the Internal Revenue Service or your tax advisor for information about a rollover IRA and your options when hiring or firing employees who wish to retain their current retirement plan.

The term IRA stands for individual retirement account. There are a variety of different IRA options available to investors seeking a way to build savings for retirement, including self-directed IRA's, simple IRA's for the self-employed and IRA's created by employers. To thoroughly understand IRA options, it's best to familiarize yourself with the various different types of IRA's as well as some key terms. By understanding different IRA options, investors can protect themselves from unwanted taxes or penalties.

Action Steps
The best contacts and resources to help you get it done

SEP IRA

The SEP IRA, also known as the Simplified Employee Pension Plan, allows the self-employed or employers to establish a retirement plan. The SEP allows employers to make tax deductible contributions for their employees. Taxes on these contributions are deferred until the money is distributed to the employee. In order for this to work, the employee must also maintain a traditional IRA, into which these contributions are deposited.

I recommend: Beacon Capital Management Advisors offers information about the SEP IRA, such as contribution limits, contribution deadlines and establishing an account for self-employed individuals without employees.

Simple IRA

The simple IRA, which is an account created by an employer or self-employed individual, enables employees to make pre-tax contributions from their earnings. Money placed into the account is considered to be an elective deferral or salary reduction. It's an elective deferral, because it isn't taxed until the money is distributed, usually after retirement. It's a salary reduction, because the money comes directly from the paycheck.

I recommend: The United States Department of Labor provides a detailed description of the Simple IRA, including advantages, eligibility, steps necessary to establish such a account, operating the account and closing the account.

Self-directed IRA

Self-directed IRA's are also known as checkbook IRA's, because money is deposited directly into the individual's account for immediate use. The self-directed IRA, allows the investor to invest in anything that the internal revenue code allows. Some self-directed IRA's include real estate, limited liability companies, private stock offerings, leases and lease options and joint ventures.

I recommend: Pensco Trust Companies offer more details about the use and benefits of self-directed IRA's.

IRA withdrawal

The IRA withdrawal is also known as an IRA distribution. According to tax law, individuals must begin taking distributions from their accounts when they reach 70.5 years of age. There are minimum distributions or withdrawals that must be taken from these accounts once the account holder reaches 70.5 years. These distributions vary from year to year as formulas change.

I recommend: Mutual of America provides detailed information investors need to know about IRA withdrawals.

IRA rollover

An IRA rollover refers to the transfer of money from a retirement account into a Roth IRA or a Traditional IRA. An IRA rollover can occur through one of two methods, including a direct transfer or a check. There is a 20% penalty if the check does not rollover directly from one custodian to another.

I recommend: Learn more specifics about the nature of IRA rollovers at Roll Over IRA.

Roth IRA

The Roth IRA is a particular type of individual retirement account. Contributions to the Roth IRA are made with post-tax dollars. The principle on the Roth IRA grows tax free. There are no taxes required when money is withdrawn. Basically, with a Roth IRA, you pay taxes one time and then your money grows without any further tax assessment.

I recommend: For a more detailed description of a Roth IRA, visit IRS.gov.