David Posted March 31, 2015 Report Share Posted March 31, 2015 TP left employer mid year 2014 and started his own consulting business. His W-2 shows 401K deductions for $11,500. TP is over 50 years old.The maximum SEP allowable based on his Sch C profit is $19,500.The program is not limiting his SEP to maintain a total of $23,000 between his 401K and SEP.Is he allowed to also contribute $19,500 to his SEP after contributing $11,500 to his 401K?Thanks. Quote Link to comment Share on other sites More sharing options...
joanmcq Posted April 1, 2015 Report Share Posted April 1, 2015 The SEP isn't limited to $23k, there is an employee portion & a profit sharing portion. Look at the detailed calculation worksheet to see how the SEP is being calculated. If he only had a SEP, the limit would be about $46k if his SE income allowed it. 1 Quote Link to comment Share on other sites More sharing options...
Pacun Posted April 1, 2015 Report Share Posted April 1, 2015 Make sure you check on his W-2 that he was covered by a retirement plan and you might get a different result. Quote Link to comment Share on other sites More sharing options...
David Posted April 1, 2015 Author Report Share Posted April 1, 2015 OK, thanks.His W-2 indicates he has an employer retirement plan. The program allowed both the 401K $11,500 contribution and the SEP contribution.Should I be worried? Quote Link to comment Share on other sites More sharing options...
Pacun Posted April 1, 2015 Report Share Posted April 1, 2015 Yes, you should double check to make sure he can put more than 17.5K on his retirement account provided he was covered at work. Quote Link to comment Share on other sites More sharing options...
jasdlm Posted April 1, 2015 Report Share Posted April 1, 2015 Joan is correct. Quote Link to comment Share on other sites More sharing options...
Richcpaman Posted April 2, 2015 Report Share Posted April 2, 2015 Joan is correct. Yes. If your client had set up a SIMPLE plan for his Biz, then his contribution might be limited, but not the SEP. Rich Quote Link to comment Share on other sites More sharing options...
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