SEP IRA and Traditional IRA
I combined a client’s few small mutual funds one year ago into one combined IRA. The funds where for the most part tilted as SEP IRA. This year he makes a contribution into a SEP IRA, so we established a new account titled SEP IRA. His accountant and attorney insist that he should not have retilted the small funds as a traditional IRA and that he should have me retitle the traditional IRA as a SEP IRA. Other than the amount of contribution that can be made to a SEP IRA, I fail to understand why these advisors are insisting that he did something wrong and am hoping for some guidance on this. Should we have kept everythign tilted as SEP IRA previously?
Permalink Submitted by Alan Spross on Fri, 2012-04-13 16:34
This should not be a problem given that a SEP IRA owner can transfer or roll a SEP IRA balance to a traditional IRA anytime they wish.
Permalink Submitted by Jan Haven on Fri, 2012-04-27 21:13
And a TIRA Can accept SEP contributions as well?
Permalink Submitted by Jose Morales on Fri, 2012-04-27 21:25
Yes, a Traditional IRA can accept a SEP contribution. In fact, what we all refer to as a SEP IRA is really just a Traditional IRA in which SEP contributions are made.