Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
cancel
Showing results for 
Search instead for 
Did you mean: 
mlg74
New Member

Do I use business or personal bank account for SEP IRA contributions for Single member LLC?

I am setting up a SEP IRA to make contributions for the 2017 tax year. I have a single member LLC. Do I use my personal or business bank account to fund the account, or does it matter since it is a pass-through entity?

4 Replies
dmertz
Level 15

Do I use business or personal bank account for SEP IRA contributions for Single member LLC?

If you've elected to treat your single-member LLC as a corporation (S corp or C corp), the contribution must be made from corporation funds (the business account).  If the single-member LLC is not an corporation, it is a disregarded entity (reporting on Schedule C of your personal tax return) and there is no ownership difference between the business account and your personal account, so it wouldn't matter which account you used.

mlg74
New Member

Do I use business or personal bank account for SEP IRA contributions for Single member LLC?

Great thanks for the excellent information! Just to clarify, if I use my personal account, I will not "pierce the corporate vail", correct?
dmertz
Level 15

Do I use business or personal bank account for SEP IRA contributions for Single member LLC?

If it isn't a corporation, there is no "corporate veil" with regard to taxation.  With regard to liability, LLCs are a matter of state law, so you would have to refer to your state law to determine if using funds from your personal account would jeopardize your liability protection.  I suspect that making the SEP contribution from a personal account would not affect liability protection of the LLC since doing so would serve to not reduce the assets in the business account that would available to cover liability claims.
dmertz
Level 15

Do I use business or personal bank account for SEP IRA contributions for Single member LLC?

I've altered my previous comment.
Dynamic AdsDynamic Ads
Privacy Settings
v