Is there a problem with setting up a SEP for 2008 (by 4/15/2009 when sole proprietor's f1040 will be filed), and then promptly set up a 401k QRP for 2009 and never fund further into the SEP?
We'd like to capture an ER contribution deduction for 2008, and then have a solo K for 2009 and later. There are no other EEs.
Full Version: SEP for 1 year, then QRP
QUOTE (J Simmons @ Apr 4 2009, 06:19 PM) 
Is there a problem with setting up a SEP for 2008 (by 4/15/2009 when sole proprietor's f1040 will be filed), and then promptly set up a 401k QRP for 2009 and never fund further into the SEP?
We'd like to capture an ER contribution deduction for 2008, and then have a solo K for 2009 and later. There are no other EEs.
We'd like to capture an ER contribution deduction for 2008, and then have a solo K for 2009 and later. There are no other EEs.
As a SEP is not a qualified plan there is no permancy requirement. A SEP can be terminated at any time although an amendment may be required and notice of the amendment would need to be provided to the participant. The funds in the SEP IRA can be rolled over to a qualfied plan.
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