Discussion:SEP contribution limits
From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
Discussion Forum Index --> Basic Tax Questions --> SEP contribution limits
Discussion Forum Index --> Tax Questions --> SEP contribution limits
| 14 March 2011 | |
| I have an S-corp with 2 shareholders. SH-1 has $230k of comp and SH-2 has $170k of comp. They wish to contribute the maximium amounts to their SEPs which I know is the lesser of 25% of comp or $49,000. I also understand that the contributions should be based on a uniform percentage. If we contribute the max of $49k for SH-1, then his contribution % is only 21%. My question is whether we have to bring the contribution % down for SH-2 to equal that 21%. He would like to contribute the entire 25%. They do not have any other eligible employees so that is not an issue. | |
| 15 March 2011 | |
| The corporation can put something in writing indicating its intention to contribute 25% of compensation to employee SEP Ira accounts for 2010. When it's time for the corporation to make its contribution, SH-1 gets limited to $49,000 by the 415(c) amount that you mentioned. SH-2 gets the full 25%. | |
To join in on this discussion, you must first
log in.
