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Self employed Retirement Contributions

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Level 2

Can a self employed Schedule C business contribute to both a Sep IRA and a 401K for the same year? This is his only business, has no employees.  He wants to make a contribution to both.  

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6 Replies 6
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Level 15

Yes but why? He will have one overall limit on contributions.


ex-AllStar
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Level 2

sjrcpa - I really don't know why he wants to do that either?  I think because he has both set up maybe he wants to split it up??  I was initially confused about whether or not he could actually do that so that is why I was reaching out!!!  Thanks for your quick response!

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Level 10

Why doesn't he have a Solo 401k, which is the same as both?

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Level 12

"Why doesn't he have a Solo 401k, which is the same as both?"

Or, hey, why not all Three? Because I smell Financial Manager fees...

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Level 3
Level 3

He can contribute to both a SEP and a Roth  or traditional IRA.  Contribution limits are independent of each other. 

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Level 10

Yes, the SEP and IRA limits are separate, but having a SEP might eliminate or limit the deductibility of an IRA, depending on the income level.

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