contribution limits across multiple plans
Client is contributing the max $6000 to an IRA (he’s doing a back door Roth due to income). Also participates in an employer 401k and maxes his deferrals there at $19,500.
Client also is considering forming an LLC relative to some self employment income. If he does that and the LLC income permits it, by establishing a SEP IRA can he contribute the full $58,000 to the SEP or only the difference between his total 401k additions and the $58,000 IRS limit for 2021?
Are the SEP contributions (as employer contributions) totally separate from the 401k, just as his Roth IRA contributions are?
Permalink Submitted by Alan - IRA critic on Thu, 2021-09-30 16:08
Yes, they are separate from the 401k, providing client does not have a major interest in the 401k sponsoring firm. However, if the other employer offered a 403b instead of a 401k, the rules are different and the SEP contributions would be limited.