SEP scenario
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I hope this is stated as simply as possible; hopefully most of you reading this know the answers.
Let’s say that a wife had set up and contributed to a SEP-IRA when she worked as a real-estate agent twenty years ago. Since leaving the real estate business several years later she has made no additional contributions to her SEP-IRA. Recently she has begun working, part time as an administrative assistant for the business of her spouse, who is a consultant. Given those facts; the following questions:
Can she start making contributions to the same SEP that she had established when she was a real estate agent?
Or does the spouse’s consulting business, which has already established a SEP-IRA for the spouse, need to also establish another SEP-IRA account for her?
If so, could she then merge her prior SEP-IRA into her new SEP-IRA?
Would any of the preceding answers be changed if she were already over the age of 70 1/2?
Sincere thanks for your help on this matter,
Permalink Submitted by Alan Spross on Wed, 2012-03-14 04:14
She can use the old SEP IRA is the current custodian permits it.
If not, a new SEP IRA can be established and the old SEP transferred into it as a rollover contribution to consolidate accounts.
By her required beginning date RMDs must begin from a SEP IRA, which is just another form of traditional IRA. RMDs are required even though current contributions SEP contributions can still be made.
Permalink Submitted by Geoffrey Foisie on Wed, 2012-03-14 12:46
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Alan
Thanks for your reply. Just to clarify, if her IRA custodian required her to have a new SEP-IRA, she could set up a new SEP-IRA even though she is over 70 1/2 (i.e., there is no age limit to setting up a SEP-IRA)?
Geoff
Permalink Submitted by Alan Spross on Wed, 2012-03-14 20:14
Correct. No age limit for SEP contributions or to set up a new SEP account, but she cannot make a TIRA contribution.