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Business News & TipsAlan S. Moore / L’Observateur / December 17, 1998If you’re a physician, you’re probably accustomed to making important decisions which can affect your patients, business, personal life and financial goals. These decisions can be time critical and not withoutconstraint. But what about the non-time critical decisions, likeretirement, that can have a dramatic impact on your life now and in the future…In the arena of tax-deferred retirement vehicles, Simplified Employee Pension Individual Retirement Accounts (SEP IRAs) often represent a very solid value to an employer. Unlike some qualified plans, SEP IRAs areeasily established and require an absolute minimum of administration. SEPIRAs also have the added advantage that they can be established and funded right up to April 15 or filed-for extensions.

SEP IRAs are a good tax-planning tool for you because you can contribute up to 15 percent of your compensation (Adjusted Net Business Income, if applicable) up to the annual compensation cap of $160,000 (for 1998 and 1999 the maximum dollar amount is $24,000) thus reducing your overall tax bill. You can also deduct all contributions up to 15 percent of thecompensation paid to each employee covered under the plan. Please notethat you are only required to include those employees who have attained age 21 and who have been employed in any three of the preceding five calendar years, including part-time employees who earned annual compensation of at least $400 (in 1998 and 1999). However, if you sochoose, less restrictive eligibility requirements can always be established.