SEP
I am over 70 1/2. I am employed by an S-corp with 2 employees (including me) that has a SEP. Next year in addition to being covered by the SEP as an employee I will have schedule C income of about $85,000. I assume I can establish a SEP for my schedule C business, but am I subject to the overall limit for SEP contributions of $51,000, or is each SEP independent of the other with its own contribution limits? I know I have to take out MRDs since I’m over 70 1/2.
Hal Richardson
Permalink Submitted by Alan - IRA critic on Sun, 2013-10-13 17:46
The 51k limit is “per employer”, but there are complex rules that determine whether you must be treated as a single employer and that depends on your ownership of the S Corp or perhaps a spouse’s ownership. Who owns or controls the S Corp?
Permalink Submitted by Harold Richardson on Tue, 2013-10-15 13:04
I own 50% of S-Corp, other 50% owner is unrelated. No other employees. Sch C has no employees.
Permalink Submitted by Alan - IRA critic on Tue, 2013-10-15 17:13
If more than 50% you would be out of luck, but at 50% or less ownership of the S Corp, a separate limit of 51,000 applies for each business.