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Small Doctor Group - Emergency Room Setting


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Facts:

Partnership of Doctors - not entirely clear on how they are partners but each has his / her own SEP.

There are 2-3 individuals considered to be "shared staff." They are paid by the 'parntership.'

In 2013, the shared staff went from being paid by 1099 to W-2.

1) Can the docs continue to maintain their individual SEP's - I believe the answer here is no.

2) Do the shared staff people need to be covered - the answer would be YES

Could they establish a new SEP that covers all the docs in the partnership and the staff? If they are a partnership in the literal sense, they could not have a SEP - only an employer and not a partnership can set up a SEP.

SEP is murky for me - I'd think a straightforward profit sharing plan would make more sense all the way around.

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You are correct about the shared employees have to be covered. The rest of your questions depend on the business arrangement. How many of the doctors are incorporated? and and who owns what?

They probably don't want to pay an ERISA attorney to sort this out. but they probably should. The affiliated service group rules can be really tough to get through.

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I recommend you start by finding out what type of income tax form the doctors themselves recieve.

If it's a 1099 (and we assume that 1099 reporting is proper) then each doctor is a proprietor and having their "own" SEP would be fine.

If it's a K-1 from the "partnership" then having their separate "own" SEPs is really bad (especially if they're varying their rates of contribution) since the SEP should have been adopted at the partnership (employer) level. If you find this to be the case get them to the proverbial "good ERISA attorney" ASAP because the issue of treatment of staff becomes minor in comparison.

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