Welcome Guest. Register Now!  



Reply
 
LinkBack Thread Tools Search this Thread Display Modes
  #1 (permalink)  
Old 12-27-2014, 04:55 PM
Junior Member
 
Join Date: Dec 2014
Posts: 1
401k and sep IRA together?

Question about opening new retirement acct - I am a partner in an LLC (20% owner with about 20 employees) and in that business retirement plan I max out the self directed part (17500), we have a 3% safe harbor and also a profit sharing portion - total annual contribution is about 35k put away which is only about 10% of my salary there and less then the federal limit of total contributions which I think is 52K. I am also an independent contractor for a separate business (no other employees there)that I earn income from during the year. Can I open a separate sep-ira for this other independent contractor income in order to max out my contributions?



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
  #2 (permalink)  
Old 12-27-2014, 05:50 PM
Moderator
 
Join Date: Oct 2010
Posts: 5,258
Quote:
Originally Posted by rwinakor View Post
Can I open a separate sep-ira for this other independent contractor income in order to max out my contributions?
yes. A SEP can be set up for your business even if you are now participating in 401k plan The max contribution depends in part on whether the contribution is for an employee or, in the case of those self-employed, the owner. For 2014, the maximum contribution for the self-employed, the contribution limit in 2014 is the lesser of $53k or 20% of earnings in general, The 2014 Individual 401k contribution limits are $52k and $57.5k if age 50 or older . The 401k contribution consists of 2 parts a salary deferral contribution and a profit sharing contribution. The total allowable contribution adds these 2 parts together to get to the maximum Individual 401k contribution limit; in addition to your self-employed income you also have a regular job where you contribute to a 401k. your 401k contributions does not need to reduce the amount you can contribute to your SEP IRA,assuming that the 401k and SEP IRA are with two different companies not under common control. While you, as an employee contribution limits to a 401k are per person, the employer contribution limits (including a SEP IRA for the self-employed) are per plan..

Note; If the SEP-IRA permits non-SEP contributions, you can make regular IRA contributions (including IRA catch-up contributions if you are age 50 and older) to your SEP-IRA, up to the maximum annual limit. However, the amount of the regular IRA contribution that you can deduct on your income tax return may be reduced or eliminated due to your participation in the SEP plan.



Digg this Post!Add Post to del.icio.usBookmark Post in TechnoratiFurl this Post!Reddit! stumble!bookmark in google!Share on Facebook!
Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
solo 401k change to roth solo 401k meffoar IRA/Sep 1 02-19-2014 06:29 AM
401k b8a3r For 2013 1 01-29-2014 07:34 AM
How much tax will I pay for 401K withdrawal chip Estimated Taxes 2 01-25-2013 02:14 AM
401k and NJ SIT kkv1 New Jersey 2 01-08-2012 03:26 PM
401K help Please! daisy1950 IRA/Sep 5 01-30-2009 10:27 PM

Follow us on Facebook Follow us on Twitter Google Buzz Rss Feeds

» Categories
 
Individual
 » Income
 » IRA/Sep
 » Medical
 
Corporations
 » Payroll
 
Forum for CPAs
 
Financial Planning
 
 
 

» Recent Tax Q&A
No Threads to Display.