How much may an employee defer under a SARSEP?
• 25% of compensation, or • $15,500 for 2007 ($15,500 for 2008; subject to annual cost-of-living adjustments). The $15,500 limit applies to the total elective deferrals an employee makes for the year to the SARSEP and any 401(k) plan or 403(b) tax-sheltered annuity plan. 15. Can catch-up contributions be made to a SARSEP? Yes, additional “catch-up” elective deferral contributions are allowed for employees who have reached age 50. Catch-up contributions are limited to $5,000 for 2007 and 2008 and subject to cost-of-living adjustments thereafter. 16. Can designated Roth contributions be made under a SARSEP? No, designated Roth contributions cannot be made under a SARSEP. 17. What is considered compensation for a self-employed individual under a SARSEP? Compensation of self-employed individuals. Self-employed individuals’ compensation is their earned income as defined below. Compensation does not include tax-free items (or deductions related to them) other than foreign earned income and h
