Directors Fees

[Guest cfpinyo]

i have a pulmonary doctor who earns directors fees from a local hospital. He receives a 1099 for these services and he is not employed there. He also owns his own medical llc and has elected entity status as a corp. Doctor wants to max fund a SEP for his director fees but TPA says no since he owns 100% of his entity and has employees and receives a W-2 for income paid by his entity for professional services. Is this correct?

[K2retire]

The LLC and sole prop. (director's fee) are a controlled group, meaning they must be treated as a single employer for plan purposes.

[Guest cfpinyo]

The LLC and sole prop. (director's fee) are a controlled group, meaning they must be treated as a single employer for plan purposes.

Hi K-2 thanks for the input. Any suggestions on how he can max out contributions and limit contributions for his employees.

[K2retire]

My knowledge of SEPs wouldn't fill a thimble. But in that situation I've worked with many cross tested 401(k) plans. some paired with DB plans. This typically only works if the owner is older than some (perhaps most) of the employees are significantly younger than the owner.