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SEP IRA's


Guest American Pension Consulta
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Guest American Pension Consulta

The SEP IRA limits for 2002 do not appear to be changed under EGTRRA. They remain at 15%. Compensation will increase to $200,000 capping SEP contributions at $30,000. Profit Sharing Plans will be able to accept 25% of pay and will be capped at $40,000. Does anyone know if this was intentional or was it an oversight? If it was just an oversight, is it likely to be addressed in separate legislation?

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There may be a mistake. Take a look at new Section 404(h) for the 25% deduction limit for SEPs. However, I can't seem to find a similar change to the 15% contribution limit in Section 402(h).

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I have been wondering about this same thing. I was reading an article on the 401K Cafe web site under the IRA section. This article said:

"For SEP-IRAs, the maximum annual contribution limits will change to the lesser of $40,000 or 100 percent of salary. Currently, the limit is the lesser of $35,000 or 15 percent of salary."

I am going to continue to look for a definitive answer other than this article. However, this looks promising.

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American Pension Consulta,

You are right. It appears that it was an oversight. The respective regulatory bodies are currently reviewing this. We anticipate that subsequent treasury regulations etc may correct this 'oversight'

Life and Death Planning for Retirement Benefits by Natalie B. Choate
https://www.ataxplan.com/life-and-death-planning-for-retirement-benefits/

www.DeniseAppleby.com

 

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