Guest Amanda F Posted October 3, 2000 Report Share Posted October 3, 2000 I am a principal in an inc. biz that does not have any retirement plan in place. Therefore, I contribute to an IRA. As a second biz in which I alone am employed (from a home office), I earn approx. 20K per year. Is it possible for me to set up a Simple or SEP IRA for this revenue? Which option applies if I am the sole owner and sole ee? Can I simultaneously continue to contribute to my IRA and claim the 2K fed. tax benefit? I have tried to read the regs, speak to investment firms and accountant but have gotten conflicting information. Thank you for any help. I own 20% stock in my primary biz's inc. Link to comment Share on other sites More sharing options...
Dave Baker Posted October 3, 2000 Report Share Posted October 3, 2000 How much stock do you own in the incorporated business? Link to comment Share on other sites More sharing options...
Guest Matt Tuttle Posted October 3, 2000 Report Share Posted October 3, 2000 Depending on how much of the second income you want to put away and your age a de minimus 412i plan might be a better option. It would allow you to shelter much more than the simple (6,000) or the SEP (3,000) could. Matt Tuttle 203-609-9077 http://www.wealthadvisors.bigstep.com Link to comment Share on other sites More sharing options...
Gary Lesser Posted October 3, 2000 Report Share Posted October 3, 2000 See the brother-sister controlled group rules under Code Section 1563(a)(2) available on B/L. If you own (directly or indirectly) 50 percent or less, then the sole-proprietorship may maintain a qualifed retirment plan, SEP, or SIMPLE-IRA without covering employees of the other business (based only on the $20,000). If you do, your deduction for an IRA contribution may be phased-out or eliminated, which happens when an individual and/or his or her spouse is an "active participant" and modified AGI exceeds certain levels. Link to comment Share on other sites More sharing options...
Bill Berke Posted October 11, 2000 Report Share Posted October 11, 2000 In addition to the controlled group rules (and ownership ideentification), you may have to consider the affiliated service group rules - depending upon whether your home biz works with the inc.biz and how they work together. As you can tell, we need more facts to help further. Link to comment Share on other sites More sharing options...
Gary Lesser Posted December 1, 2000 Report Share Posted December 1, 2000 Probably, assuming no indirect ownership and the businesses aren't part of an affiliated service group (e.g., situations were services are provided to the other entity). If so, have your CPA look at IRC Section 414(m). Agin, your IRA contributions may not be deductible in their entirety (see above answers). Link to comment Share on other sites More sharing options...
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