SEP IRA / Defined Benefit Plan issues
I have a client who is interested in setting up a DB plan. The issue I am currently dealing with is he has contributed $12,000.00 into his SEP IRA for this year. Based on IRS Form 5305-SEP, he cannot have a SEP IRA and another qualified plan. We want to move the SEP IRA contribution back out, open an individual 401(k), and put the $12,000.00 into his 401k.
Can I simply do a return on excess?
Do I need to shut down the SEP or can I keep it open as long as I do not fund it?
Thanks,
Bob
Submitted by Bob W on Wed, 2008-12-10 18:39