I have two different home businesses in completely different types of work. I want to avoid paying as much tax as possible so I am interested in opening either an individual 401(k) account or an SEP IRA to reduce my taxable income. Do I need one retirement account for each of the lines of business? Or can I just open one account and still apply the contributions to reduce both of the two types of business income?
You DO need a plan for each business, choose to set up one or multiple plans for each of your trades.
If a taxpayer has more than one business, but only one has a retirement plan, only the earned income from that business would be considered for that plan.
Keep in mind, though– while you may have more than one qualified plan, the contributions to all the plans must not total more than the overall limits; and the deduction limit depends on the type of plan being funded.
See the link below for Small Business Retirement Plan Resources:
https://www.irs.gov/Retirement-Plans/Plan-Sponsor/Small-Business-Retirement-Plan-Resources
You DO need a plan for each business, choose to set up one or multiple plans for each of your trades.
If a taxpayer has more than one business, but only one has a retirement plan, only the earned income from that business would be considered for that plan.
Keep in mind, though– while you may have more than one qualified plan, the contributions to all the plans must not total more than the overall limits; and the deduction limit depends on the type of plan being funded.
See the link below for Small Business Retirement Plan Resources:
https://www.irs.gov/Retirement-Plans/Plan-Sponsor/Small-Business-Retirement-Plan-Resources
I have an established SEP-IRA for work as an independent contractor (physician)
Additionally, I now have a single member PLLC (healthcare)
Do I need a separate SEP-IRA for each of the above. If so, how do I calculate how much of my total SEP-IRA contributions are attributable to each?
Thanks!
Duplicate question by hlouisa:
https://ttlc.intuit.com/community/retirement/discussion/do-i-need-more-than-1-sep-ira/01/2682340