RichardL, the problem with SEPs and SIMPLEs is that if she has any employees, she has to also make employee contributions. And a daycare provider is probably not going to be able to contribute the $46,000 maximum contribution each year anyway.
Use a regular ?traditional? tax-deductible IRA. You can contribute $5,000/year, you don?t have to make any employee contributions, the money can be invested any way you want, and the contributions will reduce your taxes.
If you do want to save more each year, open a Roth IRA in addition. This is funded with after-tax money (money you?ve already paid income tax on), so no tax deduction. But money you pull out after 5 years is not taxable.
Look at Schwab.com, fidelity.com, vanguard.com or troweprice.com. all have lots of investment options for you. All are consumer-friendly. Within the IRA or Roth wrapper, you can invest in many types of investments: CDs, money market funds, mutual funds, stocks, bonds. Just don?t put all your eggs in one type of investment, and don?t invest in anything you don?t understand.
Good luck!
Source: http://rothira.solve-up.com/roth-ira/daycare-provider-401k/
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