CPA Client thinks he can contribute to a SIMPLE and SEP IRA for same tax year
A client of ours (who likes to remind us he has 25 years of CPA experience) thinks he can contribute to a SEP and SIMPLE for the same tax year. He is a sole proprietor of one business and the other business that he owns is a corporation. Therefore, he argues they are separate entities and he is allowed to make contributions to both plans.
We’ve sent him the IRS website regarding controlled entities/affiliation rules but it is more concerned about the employees’ treatment. He remains unconvinced that the IRS prohibits contributing to both in the same tax year. He remains unconvinced that these 2 businesses are considered affiliates because he is the 100% owner of each.
Can you please confirm our understanding? Is he right? Where can we find more information?
Permalink Submitted by Alan - IRA critic on Thu, 2024-02-08 23:26