Comments on: SEP IRA – Simplified Employee Pension Plan http://cashmoneylife.com/sep-ira-simplified-employee-pension-plan/ Money Management, Small Business, Career Wed, 23 May 2012 21:16:10 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Ryan http://cashmoneylife.com/sep-ira-simplified-employee-pension-plan/#comment-23013 Ryan Wed, 07 Apr 2010 00:25:17 +0000 http://cashmoneylife.com/?p=1195#comment-23013 Badri, You can be an employee for your wife's company as well as an unrelated company. The key thing to remember in that situation is to not contribute more than allowed across all retirement plans. For example, with a 401k you can only contribute $16,500 across all 401ks if you are under age 50. So if you had a 401k through your day job and a Solo 401k you could contribute $8,500 through your day job and $8,000 through the Solo 401k, or any other combination, not to exceed $16,500. That is separate from the employer match, or profit sharing. There are also limits for those contributions as well. It would probably be best to open a SEP IRA for the 2009 tax year, and you can open a Solo 401k for the 2010 tax year at any time and begin contributions for the 2010 tax year as soon as the account is open. You may wish to contact an accountant for more information - using an accountant was one of the best business decisions I made. Badri, You can be an employee for your wife’s company as well as an unrelated company. The key thing to remember in that situation is to not contribute more than allowed across all retirement plans.

For example, with a 401k you can only contribute $16,500 across all 401ks if you are under age 50. So if you had a 401k through your day job and a Solo 401k you could contribute $8,500 through your day job and $8,000 through the Solo 401k, or any other combination, not to exceed $16,500. That is separate from the employer match, or profit sharing. There are also limits for those contributions as well.

It would probably be best to open a SEP IRA for the 2009 tax year, and you can open a Solo 401k for the 2010 tax year at any time and begin contributions for the 2010 tax year as soon as the account is open.

You may wish to contact an accountant for more information – using an accountant was one of the best business decisions I made.

]]> By: Badri http://cashmoneylife.com/sep-ira-simplified-employee-pension-plan/#comment-22977 Badri Sun, 04 Apr 2010 14:33:39 +0000 http://cashmoneylife.com/?p=1195#comment-22977 Ryan - A followup question. Can I do SEP this year and open a SOLO 401K at the end of this year, so that I can contribute to solo 401K at tax time next year to take advantage of higher deductibles? Thanks. Ryan – A followup question. Can I do SEP this year and open a SOLO 401K at the end of this year, so that I can contribute to solo 401K at tax time next year to take advantage of higher deductibles? Thanks.

]]> By: Badri http://cashmoneylife.com/sep-ira-simplified-employee-pension-plan/#comment-22976 Badri Sun, 04 Apr 2010 14:12:23 +0000 http://cashmoneylife.com/?p=1195#comment-22976 Ryan, One more question on SEP IRA. The LLC company is on my wife's name. And I do some work like depositing checks and operating the debit card and banking transactions. In this scenario, when I open the SEP account on my wife's name, Do I also have to be part of SEP as joint account holder? Am I considered employee? I work full time elsewhere and draw my salary from that other unconnected company. I just work little bit for my wife's company. Please let me know if you need more information. Thanks again. Ryan, One more question on SEP IRA. The LLC company is on my wife’s name. And I do some work like depositing checks and operating the debit card and banking transactions. In this scenario, when I open the SEP account on my wife’s name, Do I also have to be part of SEP as joint account holder? Am I considered employee? I work full time elsewhere and draw my salary from that other unconnected company. I just work little bit for my wife’s company. Please let me know if you need more information. Thanks again.

]]> By: Ryan http://cashmoneylife.com/sep-ira-simplified-employee-pension-plan/#comment-22973 Ryan Sat, 03 Apr 2010 17:18:37 +0000 http://cashmoneylife.com/?p=1195#comment-22973 Badri, I believe there are ways to convert a SEP IRA into a Solo 401k, but the details of having more than one of these plans at the same time or rolling a SEP IRA into a Solo 401k are outside the scope of my knowledge. I recommend contacting a tax professional for more information. Best of luck. Badri, I believe there are ways to convert a SEP IRA into a Solo 401k, but the details of having more than one of these plans at the same time or rolling a SEP IRA into a Solo 401k are outside the scope of my knowledge. I recommend contacting a tax professional for more information. Best of luck.

]]> By: Badri http://cashmoneylife.com/sep-ira-simplified-employee-pension-plan/#comment-22971 Badri Sat, 03 Apr 2010 15:22:37 +0000 http://cashmoneylife.com/?p=1195#comment-22971 Ryan, I missed deadline to open SOLO 401k for 2009 tax year. So, my only option now is to open SEP. Is there a way we can concert SEP to SOLO later? If yes, what are the rules? Another question is on the SOLO 401K forum, Is there any remedy or any providers that can take solo 401k now for 2009 tax year before I open a account and streamline the account? Please advice. Thanks. Ryan,
I missed deadline to open SOLO 401k for 2009 tax year. So, my only option now is to open SEP. Is there a way we can concert SEP to SOLO later? If yes, what are the rules? Another question is on the SOLO 401K forum, Is there any remedy or any providers that can take solo 401k now for 2009 tax year before I open a account and streamline the account? Please advice. Thanks.

]]> By: Ryan http://cashmoneylife.com/sep-ira-simplified-employee-pension-plan/#comment-20414 Ryan Sun, 15 Nov 2009 23:28:02 +0000 http://cashmoneylife.com/?p=1195#comment-20414 Jennifer, I couldn't find any information supporting the structure of a SIMPLE plan as a Roth. I would contact a tax professional or the IRS for more information. Best of luck! Jennifer, I couldn’t find any information supporting the structure of a SIMPLE plan as a Roth. I would contact a tax professional or the IRS for more information. Best of luck!

]]> By: Jennifer R christiansen http://cashmoneylife.com/sep-ira-simplified-employee-pension-plan/#comment-20332 Jennifer R christiansen Mon, 09 Nov 2009 18:22:33 +0000 http://cashmoneylife.com/?p=1195#comment-20332 Thank you for your web site. I find it vry helpful. I thought I saw somewhere that one could struture a SIMPLE plan as a Roth? Am I correct in understanding that? Thank you. Thank you for your web site. I find it vry helpful. I thought I saw somewhere that one could struture a SIMPLE plan as a Roth? Am I correct in understanding that? Thank you.

]]>