Sep

[JON]

Client is a member partner in an LLC with employees and other partners. The LLC does not have an employer retirement plan. The ordinary income he picks up is six figure and subject to SE Tax. What if anything can he have for individual retirement plan? (regular IRA) what contribution??

He also has a small 1040 Schedule C with no employees and he has a SEP plan for that.

Jon

[Kram BergGold]

Sep

Any retirement plan connected to the LLC must be established at the partnership level and include all eligible partners and employees. For 2017 it is too late to establish a profit sharing plan. A SEP can be set up. I don't know about a SIMPLE or 401k.
So your client can do a SEP connected to the Schedule C and or an IRA or both if the AGI is low enough.

[JON]

Contribution

If you do not have coverage in any employer plan a traditional IRA deduction can be taken, but limited to $6,500.

If you want a SEP to cover your self-employed income then you can do 20% of the adjusted SE income. This is only the income from net income on real estate sales on the 1040 Schedule C.

The K-1 real estate partnerships have to set up their own plan for you to participate in. The draw back on that it is has to cover most or all employees also. This does include SE income. So my guess is to him whichever is the largest 20% of Schedule C to SEP or $ 6,500 to a regular IRA. He (single) is way over the compensation limits with the income from the K-1s.

[Kram BergGold]

Jon

Once a SEP is funded you now have a retirement plan which may limit the destructibility of the IRA.

[JON]

I agree, thanks