SEP and IRA
Can a business owner (small corp) contribute to both a SEP (employer contributions) and an IRA (personal contribution)? Is so, do we follow the income limit rules of under $90,000 to $110,000 joint AGI?
Can a business owner (small corp) contribute to both a SEP (employer contributions) and an IRA (personal contribution)? Is so, do we follow the income limit rules of under $90,000 to $110,000 joint AGI?
Permalink Submitted by Alan Spross on Mon, 2012-02-27 18:41
An individual can make a regular TIRA contribution to the SEP IRA in addition to the SEP contribution or make it to a different IRA account. But the SEP contribution makes him a participant in a retirement plan and will result in income limits to deduct the regular contribution. Make sure the IRA custodian knows which contribution is the SEP and which is the regular TIRA contribution.
For married/joint filers the MAGI limits are 90/110 for 2011 and 92/112 for 2012.
With respect to the year the individual is an active participant:
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Determination of Active Participant Status
SEP IRA&Profit Sharing Plan The individual is an active participant for the year the contribution is deposited to the individual’s account. For instance, if the contribution is for last year and deposited last year, then the individual is an active participant for last year. However, if the contribution is for last year, but deposited to the individual’s account this year, then the individual is an active participant for this year
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