BulldogTom Posted February 10, 2018 Report Share Posted February 10, 2018 TP worked for company for 6 months, then went into business for himself, sole proprietor, no employees. Contributed 8K to 401K at work. SE income will be > 100K. Can he open and contribute to a SEP this year? I know he can if it was all Sch C income for the year, but not sure if contributions to 401K from W2 income plays into this at all. I don't see anything about this in the pubs. Thanks Tom Modesto, CA Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted February 11, 2018 Author Report Share Posted February 11, 2018 Wow, I thought this was a "Quick Question" and one of you super duper smart people would know. It must be more complicated than I thought. Tom Modesto, CA Quote Link to comment Share on other sites More sharing options...
Pacun Posted February 11, 2018 Report Share Posted February 11, 2018 It is a hard question but if you want to be safe, I would ask the person to contribute only 10K. Quote Link to comment Share on other sites More sharing options...
Richcpaman Posted February 11, 2018 Report Share Posted February 11, 2018 Yes, he can fully contribute to the SEP It has nothing to do with the 401K at the former employer. There is no limitation to $18k, that would only be if he set up a SIMPLE or 401K plan, not the SEP. Rich 2 Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted February 11, 2018 Author Report Share Posted February 11, 2018 Thanks Rich. I think I found that same answer, but it was on the FAQ site at IRS.gov and I don't like to rely on that. But I think you are correct, as the FAQ is pretty emphatic that you can participate in both. Tom Modesto, CA 2 Quote Link to comment Share on other sites More sharing options...
Catherine Posted February 11, 2018 Report Share Posted February 11, 2018 No problem contributing - just watch for the correction for SE and the limitations on total contributions to all plans ($53K? or something similar) for both employee and employer (and as SE he is both). But it's also limited by overall SE income, so hitting that higher limit should not be an issue. 1 Quote Link to comment Share on other sites More sharing options...
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