Contributing to Roth IRA while having a 401K through a employer and SEP IRA through my own LLC

[wid932ddf]

So I currently work full time at a employer as a w-2 employee with a 401K. I also run a LLC as a small business that I opened a SEP IRA for as well. This year will be the last year I will run my business and will close it before end of the year. 

I already maxed out my 401k for the year, and I am looking to max out my Roth IRA of $7000 for this year since my w-2 income and my business MAGI income comes out to less than the income threshold to contribute to the Roth IRA. 

Am I allowed to max out my ROTH IRA this year and not contribute anything to SEP IRA from my business? I didn't make much profit off of my business this year, so I realized its probably a better idea to just max out the ROTH IRA. 

I can't remember, but I heard that you can either contribute for one or the other and not both. But please confirm with me on this. 

[dmertz · Accepted solution]

I'll assume that you do not own a share of the W-2 employer that would make that employer and your LLC a controlled group required to be treated as a single employer for the purpose of a retirement plan.  Since you have sufficient compensation from the W-2 employer and your MAGI will not be large enough to phase out your Roth IRA contribution, you can contribute to the Roth IRA from your W-2 income.  Separately, you can make a SEP IRA contribution based on your net earnings from self employment (or not, if you choose not to).