Keogh Plan

Keogh Plan

Unreferenced|date=July 2008

Keogh plans are full-fledged pension plans for self employed people in the United States.

History

Named for United States Congress Representative Eugene James Keogh of New York, they are sometimes called HR10 plans and are not Individual Retirement Accounts (IRA).

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Since a Keogh Plan is a full-fledged pension, there is a Keogh for every employer-sponsored pension-plan design.

A person could have a traditional defined benefit plan with a corporation, and a self-employed person can have a defined-benefit Keogh. Likewise a large company could have a defined-contribution plan like a 401(k) or 401(a) money purchase plan; likewise HR 10 plans could be set up as defined-contribution plans for self-employed earners as well.

The only difference between these plans for self-employed workers and employer-sponsored plans is the calculation of the deductible limit. This occurs merely because the employer pays its share of the FICA or Social Security tax while self-employed people must pay both the employee and the employer portion of FICA. For this reason, the net income under HR10 plans is adjusted to remove the double FICA.

The maximum annual deductible amount is the lesser of 20% of gross self-employment income or $46,000 (in 2008), where 20% of gross self-employment income is a shortcut to the long-form method of calculating 25% net Keogh earnings, as stated in the code.

Impact

ee also

*Rabbi trust


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Look at other dictionaries:

  • Keogh plan — Ke·ogh plan / kē ō / n [after Eugene J. Keogh (1907–89), U.S. Congressman whose 1965 bill established the plan]: an individual retirement account for the self employed Merriam Webster’s Dictionary of Law. Merriam Webster. 1996. Keogh plan …   Law dictionary

  • Keogh plan — ☆ Keogh plan [kē′ō ] n. [after Eugene J. Keogh (1907 89), U.S. congressman] a retirement plan for self employed persons and for the owners and employees of unincorporated businesses, similar to an IRA: see IRA1 (Individual Retirement Account) …   English World dictionary

  • Keogh Plan — A tax deferred pension plan available to self employed individuals or unincorporated businesses for retirement purposes. A Keogh plan can be set up as either a defined benefit or defined contribution plan, although most plans are defined… …   Investment dictionary

  • Keogh plan — noun a tax deferred pension plan for employees of unincorporated businesses or for self employed persons • Hypernyms: ↑pension plan, ↑pension account, ↑retirement plan, ↑retirement savings plan, ↑retirement savings account, ↑retirement account,… …   Useful english dictionary

  • Keogh plan — Ke′ogh plan [[t]ˈki oʊ[/t]] n. bus a pension plan for a self employed person or an unincorporated business • Etymology: 1970–75, amer.; after Eugene J. Keogh (1907–89), N.Y. congressman …   From formal English to slang

  • Keogh plan — /kee oh/ a pension plan for an unincorporated business entity or self employed person. Cf. individual retirement account. [1970 75, Amer.; after Eugene J. Keogh (born 1907), N.Y. Congressman] * * * …   Universalium

  • Keogh plan — A US savings scheme to create a pension plan for self employed people or employees of small and unincorporated businesses, in which tax is deferred until withdrawals are made. It can be held at the same time as a corporate pension or individual… …   Accounting dictionary

  • Keogh plan — A US savings scheme to create a pension plan for self employed people, in which tax is deferred until withdrawals are made. It can be held at the same time as a corporate pension or individual retirement account Keogh plans originated with the… …   Big dictionary of business and management

  • Keogh plan — noun Etymology: Eugene James Keogh died 1989 American politician Date: 1974 an individual retirement account for the self employed …   New Collegiate Dictionary

  • Keogh Plan — Ke|ogh Plan in the US, a personal ↑pension plan for self employed people …   Dictionary of contemporary English

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