Discussion:SEP-IRA and 401(k) contributions
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Discussion Forum Index --> Basic Tax Questions --> SEP-IRA and 401(k) contributions
Discussion Forum Index --> Tax Questions --> SEP-IRA and 401(k) contributions
| 30 November 2007 | |
| I am only trying to confirm my understanding and belief...I think I know the answer to this...
Employee over the Age of 50, fully funds 401(k) to the tune of $20500 for 2007. Also, works as a SE consultant and has sufficient income from business to fully fund a SEP. The combined contributions of the 401(k) and the SEP cannot exceed $45000 for 2007, correct? In essence, he has a max SEP contribution ability of 24500 for 2007, correct? Or is the overall limit increased for the $5000 catchup contribution making the overall limit $50,000 since he's over 50? | |
| 30 November 2007 | |
| 94nole
My interpretation is different than yours. The ยง415 limitation is determined on the employer level. The SEP could be funded to the maximum of $45K. There are no elective deferrals or catch-ups in a regular SEP so there would be no integration with the elective deferrals as an employee (assuming there are no common ownership issues). So my thinking is $20,500 as an employee in the 401(k) plus an additional $45K (assuming there is sufficient income) in the SEP. | |
| 30 November 2007 | |
| That is definitely the answer I was hoping for but wasn't comfortable reaching that conclusion myself. THanks for the effort.
I was using the worksheet found in Pub 560? to determine the answer. Working through the worksheet, I arrived at $50,000 total. Does another agree with NYEA? | |
Death&Taxes (talk|edits) said: | 30 November 2007 |
| Check this out, Nole. Discussion: Employee 401k and SE SEP especially Riley's answer | |
| 30 November 2007 | |
| D&T,
You are the man! I did search the forum but failed to find this discussion. I promise, I did. Thanks D&T & Riley...oh, and NYEA. | |
| 30 November 2007 | |
| Also:
http://taxalmanac.com/index.php/Discussion:Maximum_contribution_to_pension_plan http://taxalmanac.com/index.php/Discussion:Solo_401K If my mother were here she would say: "If it was a snake it would have bitten you." Good ole Mom. | |
| 30 November 2007 | |
| Dang...I thought I used enough key words to return these. Thanks | |
Death&Taxes (talk|edits) said: | 30 November 2007 |
| JD: I could have listed the others that I read, but when I saw Riley as the second answer, I figured 'case closed.' | |
| 30 November 2007 | |
| You did good, D. I was just razzing 94 with additional posts he had missed. I knew they were here because I had offered that solution numerous times, but not until Riley confirmed it in the one you linked to had anyone ever confirmed to me what I had known for several years. | |
