What type of retirement plan can I use?

Client has 500,000 W-2 Income; 200,000 1099 Income; Divds 3,000; interest 16,000; Cap Gains 7,000; K-1(E) from 1120S 30,000; and 48,000 Teachers Ret 1099R; I thought we might could do a sep to get the max amount to put in IRA, should I consider something else and/or is the sep ok to do? Obviously too late to do a defined bene plan for 08, Thanks



Is the W-2 from the S corporation and will the S corporation sponsor the SEP? If so the SEP is 25% of salary up to $46,000. If you’re looking at the 1099 income, the SEP limit is 20% of the net income less half of the SE tax.

Is there a retirement plan associated with the W-2 – assuming it’s not from the S Corp? If that’s the case you need to look at the rules to see how much of the $46,000 limit is available.

Denise is the expert on maximum contributions with more than one plan.



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