Sep IRA Account Funded from a personal Joint account
A client I work with has a sole proprietor business where he is the only employee. His income is schedule C income that flows to his personal tax return. He moved the money he was going to use for funding the Sep IRA from his business checking to his personal checking account he shares with his wife. Then he proceeded to fund his Sep IRA from the joint personal checking. Do you think the IRS will have an issue with funding a Sep IRA from a joint personal checking? There’s a paper trail for everything but it was operationally more efficient and easier to fund Sep IRA this way. Please provide any thoughts on this. Thank you.
Permalink Submitted by Alan - IRA critic on Mon, 2024-04-08 23:13
I doubt that this would be an issue if his checking balance can be traced to his business receipts and he can document his net earnings from self employment. However, this might be a sign that his business accounting is sub optimal.
Permalink Submitted by adam spence on Tue, 2024-04-09 13:41
Thank you. Makes sense. The contribution method I highlighted above was a work around since Schwab does not allow electronic funds transfer (via ACH) from a checking or savings account to a Sep IRA account.