hard · Certified Financial Planner Tax Planning
The Fenwick family owns a small business and is choosing between a SEP IRA and a SIMPLE IRA for 2026. Mr. Fenwick, who is 42, wants to maximize his own personal elective deferrals.
Which plan allows him to defer more of his own salary?
- The SEP IRA, which allows an elective deferral of up to 24,500.
- The SEP IRA, because it has a 72,000 total limit.
- Both are equal, as they both allow for the 7,500 IRA limit.
- The SIMPLE IRA, which allows a 17,000 elective deferral.
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