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Can I contributing to 401(k) solo and SEP for same employee Shareholder of S corporation?

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ABCD149
Level 1

I have an S Corporation with gross payroll of 50K for me as, an only shareholder and employee I have deducted 18,500 salary deferral for 401(k) solo. The employee contribution to 401k would be 12,500 at 25%. My question is, in additions to this can I contribute $12,500 (25% of wages  to SEP in the same year and deduct on my 1120S?

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All-Star

No. Your maximum annual addition to all retirement plans is 25% of salary.


The more I know, the more I don't know.

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4 Replies 4
All-Star

No. Your maximum annual addition to all retirement plans is 25% of salary.


The more I know, the more I don't know.

View solution in original post

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ABCD149
Level 1
This is from https://www.irs.gov/retirement-plans/how-much-salary-can-you-defer-if-youre-eligible-for-more-than-o...

Deferrals limited by compensation
Although plans may set lower deferral limits, the most you can contribute to a plan under tax law rules is the lesser of:

the allowed amount for that plan type for the year, or
100% of your eligible compensation defined by plan terms (includible compensation for 403(b) and 457(b) plans).

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All-Star
401(k) $18,500 is the deferral. Employer contribution to 401(k) and SEP contribution are not deferrals.

The more I know, the more I don't know.
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ABCD149
Level 1
Ok Thanks
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