SIMPLE w/ROTH
I know with a SIMPLE IRA, you cannot partake in a 401(k) or SEP in the same tax year. However, if a client is participating in a SIMPLE, making ~$40,000 AGI a year, putting $10,500 away for 2008; can she still participate and put $5,000 into her ROTH?
Permalink Submitted by Alan Spross on Tue, 2008-08-26 21:03
Yes, she can contribute to a Roth IRA.
Permalink Submitted by Mister Anonymous on Wed, 2008-08-27 02:44
[quote]I know with a SIMPLE IRA, you cannot partake in a 401(k) or SEP in the same tax year. [/quote]
I thought that a company can’t have a 401(k) or a SEP in the same year that they have a SIMPLE, but there is nothing that stops a person from having both. For instance, they could have two jobs or switch places of employment.
Can someone please confirm if I’m correct or wrong. Thanks.
Permalink Submitted by Denise Appleby on Thu, 2008-08-28 06:34
[quote=”misteranonymous123.”][quote]I know with a SIMPLE IRA, you cannot partake in a 401(k) or SEP in the same tax year. [/quote]
I thought that a company can’t have a 401(k) or a SEP in the same year that they have a SIMPLE, but there is nothing that stops a person from having both. For instance, they could have two jobs or switch places of employment.
Can someone please confirm if I’m correct or wrong. Thanks.[/quote]
You are correct. The limitation is on the employer’s side. However, the employee’s aggregate salary deferral contributions cannot exceed $15,500, plus catch-up contributions.