Can a participant contribute to their own traditional IRA if they have a SEP?
Yes, an individual may still contribute the lesser of the applicable limit or 100 percent of compensation to an IRA. However, as a participant in the SEP, the individual would be considered covered by an employer-sponsored plan. This means that the deductibility of the IRA contribution may be limited. What is a SAR SEP? A SAR SEP is a SEP plan that allowed salary deferral contributions. Because of its complex nature, the IRS ceased allowing them to be established after 12/31/1996 and created the SIMPLE IRA to replace it. SAR SEPs that were established prior to 12/31/1996 were allowed to continue and many are still in existence. I have a client who is a sole proprietor, with no employees and makes $60,000 a year. Is a SEP the right plan? There are a number of variables.
Related Questions
- If Im self-employed, can I contribute to a Traditional IRA if Im already contributing to a business retirement plan like a simplified employee pension (SEP) plan?
- Can a participant contribute to their own traditional IRA if they have a SEP?
- Can a SEP participant also contribute to a deductible IRA or a Roth IRA?
