Simple IRA Custodial change, 2024 contribution question
Employer is sole employee for an established account.
The account balance is -0- zero after Roth conversions, distributions completed 04/2024
Due to the custodial brokerage transferring this business, no 2024 contribution have been made. While the brokerage may verify the balance is -0- zero, and that no 2024 contribution has been made, they are unable to verify closure due to tax reporting issues. Notice has been made of this Plan changing to a new custodian. As the balance is -0- zero, the transfer of this account never occurred- no record exists.
Wanting to start fresh with a new custodian. The new account is established and not funded. Are there issues proceeding with our 2024 contribution to this new custodial account?
And perhaps advise to the 2024 contribution limit for this sole proprietor/1 employee (self). The “certain eligible employers” limit of $17,600 is challenging to decipher.
Thank you for your guidance all
Permalink Submitted by Alan - IRA critic on Sun, 2024-11-03 22:55
If the new custodian has agreed to open a new SIMPLE IRA, the adoption form should be the same as the earlier SIMPLE, probably a 5304 SIMPLE. 17,600 is the max 2024 salary reduction contribution assuming that there is enough SE income to support it. There is no clear IRS guidance as far as I know for this custodian change situation, but as long as there are no employees to complicate things, the IRS would likely not have issues with this.