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Non-5305 SEP with Individual 401(k)


matthny
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Hello,

I've a situation where someone created their S -Corp late in the year, so they received about $70K which will be reported on a 1099 for their SSN, and $50K since moving to the EIN.

I understand that 5305 SEPs don't integrate with the individual 401(k) but was wondering if there was any relatively straightforward way to create a SEP for the $70K that would be compliant?

It would be a one time event, as going forward the 401(k) would be maxed out.

Are there any firms that offer a prototype plan or quick to customize solution to create the SEP with relative speed and ease?

Best,

Matt

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Why not have the sole prop also adopt the S-corp plan and make a profit sharing contribution on the combined income from both entities? I'm assuming he has a 100% ownership of the S-corp but maybe that's a bad assumption on my part.

Yes, he is the 100% owner. The Individual 401k is simply the Vanguard prototype. I didn't even think he could adopt the same plan... will get on the phone with them to find out more, thanks!

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  • david rigby changed the title to Non-5305 SEP with Individual 401(k)

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