SEP IRA’s and LLC’s
I have a client that recently set up his business as an LLC in which he is the owner and only employee. The LLC will file as an S Corp and he plans to be paid a salary around $50,000. Is there any reason he cannot establish a SEP in this scenario?
Permalink Submitted by Alan Spross on Tue, 2011-05-31 21:51
No reason. Since he will be paid on a W-2, his maximum SEP IRA contribution will be 25% of his gross W-2 salary, or 49k whichever is less. The 49k would not come into play until his salary got close to 200k.