Permalink Submitted by Alan - IRA critic on Mon, 2016-03-28 02:36
Yes, and if desired the TIRA contribution can also be made to the SEP IRA. However, for any year in which a SEP contribution is made, the taxpayer is considered a retirement plan participant and will have income limits over which he cannot deduct the TIRA contribution. Should that occur, he should make a Roth IRA contribution instead of a TIRA contribution.
Adding to the original question……I want to make a $3,000 SEP IRA contribution for my assistant (age 52) for 2015. She wants to also max out her own Traditional IRA ($6,500) for 2015. Seems as if she can do both, correct? Would my assistant also be considered a retirement plan participant and also subject to the income limits over which she cannot deduct the Traditional IRA?
Permalink Submitted by Alan - IRA critic on Fri, 2016-04-01 19:37
She can make the TIRA contribution, but the deduction depends on her modified AGI and retirement plan participation. A SEP contribution makes her a participant in a workplace plan for the year IN WHICH the contribution is made, not FOR WHICH. Therefore, if no SEP contribution was made IN 2015, she would be a participant in 2016, not 2015.
Permalink Submitted by Alan - IRA critic on Mon, 2016-03-28 02:36
Yes, and if desired the TIRA contribution can also be made to the SEP IRA. However, for any year in which a SEP contribution is made, the taxpayer is considered a retirement plan participant and will have income limits over which he cannot deduct the TIRA contribution. Should that occur, he should make a Roth IRA contribution instead of a TIRA contribution.
Permalink Submitted by Eduardo Arenas on Mon, 2016-03-28 05:33
Thank you so much for the information…..
Permalink Submitted by [email protected] on Fri, 2016-04-01 19:24
Adding to the original question……I want to make a $3,000 SEP IRA contribution for my assistant (age 52) for 2015. She wants to also max out her own Traditional IRA ($6,500) for 2015. Seems as if she can do both, correct? Would my assistant also be considered a retirement plan participant and also subject to the income limits over which she cannot deduct the Traditional IRA?
Permalink Submitted by Alan - IRA critic on Fri, 2016-04-01 19:37
She can make the TIRA contribution, but the deduction depends on her modified AGI and retirement plan participation. A SEP contribution makes her a participant in a workplace plan for the year IN WHICH the contribution is made, not FOR WHICH. Therefore, if no SEP contribution was made IN 2015, she would be a participant in 2016, not 2015.