Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?

A. Employer contributions are not included in the employee's gross income

B. SEPs are suitable for large companies

C. SEPs allow the employer to make annual tax deductible contributions up to 25% of an employee's earned income

D. SEPs have a higher tax deductible contribution limit than an IRA

Answer: B. SEPs are suitable for large companies

Qualified Plans

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