Can the S-corp contribute only to a SEP account or can there be a contribution to a privately set up/owned 401 K ? Owner has W2 Salary from Scorp / with 25% towards SEP?

Can the S-corp contribute only to a SEP account or can there be a contribution to a privately set up/owned 401 K / Roth account.

Currently S-corp contributes only to Owners SEP account .

(Owner who is a employee of the Scorp receives a yearly salary via W2). The current contribution to SEP is 25% of Salary

1421

Expert Alumni

Jun 1, 2019 9:38:17 AM

An S-corp cannot have two concurrent retirement plans.

If the S-corp already contribute to a SEP plan, it cannot operate or contribute to a 401(k) plan or designated Roth account..

New Member

Jun 1, 2019 9:38:20 AM

What if the personal SEP-IRA was never setup with 5305, is it then an "official business" SEP account? And if there was another employee introduced to the S-Corp and wanted to setup a 401k for him, can you contribute to both at that point? And if not, are you able to give 1099 amount to owner of S-Corp so he can contribute that to his personal SEP-IRA, as long as he also doesn't contribute to the business 401k?

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Can the S-corp contribute only to a SEP account or can there be a contribution to a privately set up/owned 401 K ? Owner has W2 Salary from Scorp / with 25% towards SEP?