Maximum contribution to multiple IRA plans

Submitted by ben nahid on Thu, 2015-09-17 16:20

I am retired but working part time for an engineering company and contributing to the company 401 k plan (salary deferral).

Also I am self employed doing real estate business and have a self directed 401k plan at Fidelity. In this case I am deferring salary and contributing profit sharing to my plan

Can I contribute the maximum amounts allowed to both plans independently and get the max deductions for each plan or am I limited to a total maximum deduction?

My CPA says I am limited to max of one of the plans, which ever is higher (Self directed plan in my case). Fidelity says my salary deferral is limited but the profit sharing is not.

Please clarify

Thanks.

Ben Nahid

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Permalink Submitted by Alan - IRA critic on Thu, 2015-09-17 17:04

Fidelity is correct. You are limited to a total of 18,000 (24,000 if age 50+) of elective deferrals combined. But the company or profit sharing match is a separate limit per plan with the total amount contributed to each plan being limited to 53,000 (59,000 age 50). You probably should max out the eng. employer plan to get the max company match there, then decrease your elective deferrals in real estate plan by the amount you will contribute to the eng plan (total of these limited as above). Then make the profit sharing contribution to the real estate plan such that the total contributions for that plan do not exceed 53,000 (59,000).

Permalink Submitted by ben nahid on Fri, 2015-09-18 18:56

Follow up question.First thanks for the clarification. Is there any IRS document that addresses your above statement for my future reference?Much appreciatedBen