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Can I max both my employers 401k AND my SEP sole-proprietor plan? Do they have separate limits or a combined yearly limit? I work 50% for myself and 50% for employer.
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Can I max both my employers 401k AND my SEP sole-proprietor plan? Do they have separate limits or a combined yearly limit? I work 50% for myself and 50% for employer.
Yes, you can contribute to both plans .
TurboTax will help you calculate the maximum contributions.
The IRS does consider these two separate companies as long as they are not under common control.
Here is an IRS link that addresses this: SEP and 401K
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Can I max both my employers 401k AND my SEP sole-proprietor plan? Do they have separate limits or a combined yearly limit? I work 50% for myself and 50% for employer.
Your participation in your employer's 401(k) has no bearing on the amount that you are eligible to contribute to the SEP IRA based on your net profit from self-employment. SEP contributions are employer contributions and the limit on employer contributions at one employer is determined separately from the limit on employer contributions at another employer.
Be aware, though, if the two employers have similar ownership, the two employers might be considered to be a single employer with respect to establishing a retirement plan. I assume that you do not have a substantial ownership interest in the employer with the 401(k).
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