I am in a bit of a predicament trying to figure out what is the best option going forward.
I am a business owner with 3 employees and offer a Simple IRA, that I personally max out and offer 3% match to my employees who have all declined to start. I also have a Roth IRA that I had to stop contributing to as I am over the MAGI income threshold ($230k, make $250k). Form 8606 pro-rata rules are biting me a bit hard.
However, learning more about SEP IRA's it might be wise and most beneficial. From my understanding, doing this I can use my contributions as a deduction on my taxes, reduce my taxable potentially below the MAGI and be able to once again contribute to my Roth IRA and maximize returns.
401(k) is not an option as the maintenance fees are too high.
Questions:
1. From my understanding, SEP IRA's MUST be not just offered but given to each employee as they are not salary deferral, but employer contributions.
2. Those contributions must be EQUAL, but is that percent or dollar amount?
3. If I go this route, I would not be able to do both SEP and SIMPLE, but could I make the change in the middle of the year, or best to wait until the next tax year?
4. Seems I cannot rollover my Simple IRA unless it has been active over 2 years which it has, but I just transferred from one broker to another. Does that reset the 2 years?