SEP/401K Contribution Multiple employer Rule
My client receives a salary from employer (he does not own any part of company) and also receives 1099-Misc income from that same employer upwards of $500K. He contributes to the employers 401k and receives matching (total 23,500). Can he also contribute $49,000 to a SEP through the company he owns since they are two different employers or since his income is solely derived from that one company is he required to aggregate it?
Permalink Submitted by Alan - IRA critic on Thu, 2014-12-11 02:28
Contributions to the SEP IRA can only come from net earnings from self employment or W-2 income if an S Corp. If he has no income, he cannot use other income from the other employer to fund the SEP contribution.