Discussion:Retirement Plans
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Discussion Forum Index --> Tax Questions --> Retirement Plans
| 2 February 2006 | |
| A partner in an LLC. Income of about $280,000 projected for 2006.
Will have Keogh contributions of about $33,000. Will have a choice of participating in a 401(k) or not. Question: What are the options for this person? Can they set up a SEP and contribute? I am very murky about the retirement contribution rules and regulations. Thank You! | |
| 2 February 2006 | |
| I think there can be multiple plans if the individual has different businesses but there is a maximum contribution overall, ie. you must add all contributions together and apply the maximum contribution in total. For example, a ROTH and a Regular IRA the max you can contribute between the two is $4,500.. | |
| 2 February 2006 | |
| hi, you are out of options post year end planning. one cannot adopt a 401k feature to an already established PSP post year end. one cannot set up a single member SEP plan in addition to an employer plan, ie the partnership plan . you need to worry about the nondiscrimination rules if there are employees to the partnership. you need to review the rules with a plan administrator for 2006. bye | |
| 2 February 2006 | |
| First question - - how is this LLC being taxed as a partnership or Sub S? | |
| 2 February 2006 | |
| The LLC can set up a SEP and make a contribution that will be allocated to owners and employees. I believe that it is too late to set up a SEP for 2005. As I remember, the account has to be opened by December 31, 2005 to make a contribution for 2005 even though the actual contribution is not due until the due date of the LLC tax return. | |
| 2 February 2006 | |
| ray is ok if you have multiple business but you dont state that. ir so you can set up a SEP post year end for the second business and comply with the rules for employees of the SEP | |
| 2 February 2006 | |
| sorry i dont agree with warren you have a keogh/psp in place for the partnership and cannot do a SEP as well. | |
| 2 February 2006 | |
| Setting up a SEP in addition to a 401(k)/profit sharing plan would be redundant since the SEP contribution reduces the profit sharing contribution dollar for dollar. | |
| 2 February 2006 | |
| Assuming the LLC is his only source of income and the LLC has formed the Keogh, then your done. If there was a 401k option tied to the Keogh then you still have this available ($9,000 plus $4,000 if ove 50 years old)The 401k contribution would be limited by the annual maximum of $42,000 (42,000-33,000 = 9,000). The catch up is not limited. | |
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