Controlled Group SEP/IRA Accounts
I formerly had 2 sole proprietorships – a CPA firm and securities/insurance firm. In 2008 I reorganized the CPA firm into an LLC, with an S corp election. I’ve had a SEP plan for many years, covering myself and a long-term loyal employee. I have 3 questions:
1. Does a separate SEP plan have to be established under the sec/ins firm, or since there is a controlled group, can contributions be made under the CPA-established plan?
2. Can sec/ins contributions on my behalf be made to my existing SEP/IRA or does a new SEP/IRA account have to be established?
3. Self-employed health insurance premiums are added to my W-2. I presume those amounts are not included in wages for purposes of calculating the conribution on my behalf. Am I correct on this issue?
Thanks!
Sherry
Permalink Submitted by mk foss on Tue, 2009-09-08 17:27
The new entity can “adopt” the previous SEP by a corporate (or LLC) resolution.
I’ve never come across the question of health insurance premiums as wages for SEP purposes – most SEPs use W-2 wages. However, since only the owner-employee has health insurance premiums included on Form W-2, it would seem discriminatory to include them.