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

[mlg74]

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?

[dmertz]

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 a 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]

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

[dmertz]

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]

I've altered my previous comment.

[Sgeyen]

What about taxes on using a personal checking account into a sole proprietorship business sep IRA? Since they're treated as traditional IRAs and money from personal account already taxes.

[dmertz]

For a permissible SEP contribution the sole proprietor gets a self-employed retirement deduction on Schedule 1, converting the after-tax money from the checking account into pre-tax money in the SEP-IRA.