J.K. Lasser's Your Income Tax Professional Edition 2017

Chapter 41 Retirement and Medical Plans for Self-Employed

1. 41.1 Overview of Retirement and Medical Plans
2. 41.2 Choosing a Qualified Retirement Plan
3. 41.3 Choosing a SEP
4. 41.4 Deductible Contributions
5. 41.5 How To Claim the Deduction for Contributions
6. 41.6 How To Qualify a Retirement Plan or SEP Plan
7. 41.7 Annual Qualified Retirement Plan Reporting
8. 41.8 How Qualified Retirement Plan Distributions Are Taxed
9. 41.9 SIMPLE IRA Plans
10. 41.10 Health Savings Account (HSA) Basics
11. 41.11 Limits on Deductible HSA Contributions
12. 41.12 Distributions From HSAs
13. 41.13 Archer MSAs
14. 41.14 Small Employer Health Insurance Credit

Self-employed persons and partners can take advantage of tax-sheltered retirement plans or simplified employee pension plans (SEPs) (41.2).

Advantages flow from: (1) tax deductions allowed for contributions to the plan (a form of forced savings); (2) tax-free accumulations of income earned on assets held by the plan; and (3) in limited cases, special averaging for lump-sum benefits paid from a qualified retirement plan on retirement.

If you have employees, you must consider the cost of covering them when setting up your plan.

If you do not have any other retirement plan and have no more than 100 employees, you may set up a salary-reduction SIMPLE plan.

Sole proprietors must have minimum essential health coverage. Those who want to buy it through a government exchange must use the Marketplace for individuals; they cannot use the SHOPs for small businesses. Self-employed persons ...