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What kind of plan is this?

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    #16
    Originally posted by Lion View Post
    At 77, is there a way to disqualify himself as an employee qualified to have SEP funds contributed by the company to his account? Can he be less than a full-time employee and not qualify, for instance?
    Originally posted by TXEA View Post
    If he earns $450 and has worked in three of the last five years, he is eligible . Unable to restrict part-timers (even very part-timers) if they have been there long enough.

    TXEA is correct, and that is why I suggested dumping the SEP-IRA, if that is what the plan is, and use a SIMPLE IRA instead if the owner wants to opt out and keep a plan for only the employees.
    jklcpa

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      #17
      Update on This Situation

      This is probably worth a new thread, since it so abrupt, but this one might be fresh on the respondents' minds.

      Client made a whole wheelbarrow full of money in 2014, and now he has changed his mind and wants to contribute to his SEP in order to reduce his taxes.

      He contributed 8% to the plan of each employee for 2014. This means he is limited to 8% of his own income, right? (or wrong?)
      But going through the motions, he does not seem to get the entire 8% benefit. Working through the worksheet calculations, the owner
      can only benefit by 6.8841%. (The gruesome results can be confirmed by consulting TTB Page 13-16).

      My question: Can the owner contribute a percentage that will NET OUT to 8% instead of getting washed away by the detracting factors?

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        #18
        Snaggle -

        If this is a SEP, he must use the same gross contribution amount for himself as he does his/her employees. So, if he decides to make his net 8%, then he will have to increase the contribution to something higher. He will have to use that higher percentage for the contribution to the employees.

        I assume this guy is self-employed.......

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