If you participate in an Employer sponsored Simple IRA, you can put an max of $11,500 in 2009 PLUS $2,500 for being over age 50. That total is $14,000 maximum as an employee deferral. Additionally, the employer has some matching options. By far we have found the most popular Employer matching option to be… the employer matches up to the lower of 3% of your wages or whatever you put in as an employee.
Whatever is withheld from the paycheck must be withheld in no later than the end of December for 2009 and paid in by the employer no later than January 31st, 2010.
i.e. Your wages for 2009 are $36,000 x 3% = $1,080. If you only contribute $800, Employer can only put in $800. If you contribute $3,000, Employer can only put in $1,080.
There is no commitment to put to the maximum, nor is there a commitment that you continue to participate in a subsequent year.
Note: Participation in an employer sponsored plan subjects you to limits on Regular IRA contributions. Contact us for more info at www.USATaxHelp.com