Dear Alan et al,

I have a gentleman who has $250K in W2 income as an insurance sales manager and he participates in a defined benefit plan with his employer.

He also has $50K in self-employment earnings as an insurance agent. Here is my understanding:

1. He is eligible to start a SEP plan for 2014 and fund it for a portion of his insurance agent income. This is true as long as:

– The insurance company an his business are not part of a controlled group

– The insurance company and his business are not part of an affiliated service group

2. He is not eligible to make a deductible Traditional IRA contribution because he participates in the DB plan and his AGI was above $116K married filing jointly.

If you wouldn’t mind clarifying, I’d appreciate it.

Thanks in advance,

Chris