allowable sep contribution if participating in another plan

[Guest Elizabeth Gaskins]

i have a lawyer who was self-employed for part of the year (2001) and then went to work for a firm. he was not an owner of the firm. the firm had a 401(k) profit sharing plan in which he maxed out to $10,500 on deferrals and reached $35,000 with the firms additional contribution. can he now make a sep contribution for 2001 based on his compensation earned while he was self employed? if so what is the maximum contribution into the sep? any input is much appreciated.....

[Gary Lesser]

Since the businesses are not controlled/related/affilliated (??) and he does not own more than 50% he can have a SEP and make the full contribution (but if SARSEP, total elective contributions can not exceed the 402(g) limit).

When computing the individuals earned income, the W-2 income has to be taken into account in computing the 1/2 of the IRC 164 deduction. Thus, his EI will be a little higher with W-2 income (his offset will be lower).

If you want it computed, provide the pre-plan EI and how much W-2 income was earned. Can I assume no other employees?

[Guest Elizabeth Gaskins]

thanks so much for your help gary, much appreciated. i don't need it calculated, but thanks for the offer.