TP is employed at a W-2 income job. Has a retirement plan funded by employer. TP also is self-employed in another business. Let's say his employer contributes $30,000 to his retirement account at his W-2 job. Can he still contribute the max of $42K to a SEP-IRA?
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In TTB 13-4, there is an example in the SEP-IRA section. Seems to be saying that if you have a retirement account with a W-2 employer, then that would affect how much could be contributed to a SEP-IRA? -
Example wrong?
From what I'm reading on another board, the example in TTB, page 13-4 is incorrect regarding SEP-IRA. The example says that Rick would be limited on his deduction. From what I'm reading on a different board, he wouldn't be limited. Feedback please.Comment
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SEP, etc
We had a long thread about this issue several weeks ago. The example in TTB is incorrect. The self employed plan stands on its own. The employer contributions for the W2 wages do not affect what the taxpayer can contribute for his own self employed plan. This assumes that there is no common ownership between the taxpayer's self employed plan and the employer plan. If the taxpayer receives wages from a corporation which he controls, then the two plans must be considered together for limitation purposes (that is, the corp plan and self employed plan). Also, deferrals are summed for all plans for limitation purposes.Comment
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Thanks
Thank you natiro, this was driving me crazy. Do you know if the folks at TTB acknowledeged the error?Comment
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