401(k) + SEP-IRA limit
I am hoping someone can confirm the following.
An individual that contributes to his/her 401(k)(i.e. day job; not an owner)and also owns a business can max his 401(k) contribution ($17,500) plus allocte lesser of 25% of compensation up to $52,000 (2014) without regards to section 415 annual additions limt? In other words section 402(g) limit of $17,500 has no effect on the SEP-IRA alloctaion? Correct?
What Code section can I reference for confirmation? I am getting pushback from a number of accountants.
Thank you!
Permalink Submitted by Alan - IRA critic on Wed, 2014-03-19 16:09
The 415c limit is per employer, not per person. See the definition of “Employer” in the attached IRS release: http://www.irs.gov/irm/part4/irm_04-072-007.html#d0e67. Note that the controlled group rules do apply here, but if individual has NO interest in the day job employer ownership, and no family members have controlling interests in that employer, a 52,000 limit is available for each employer.