I currently have a 5305-SEP at Vanguard where the last contributions were several years ago. I would like to open a one-participant 401k (to enable the "mega backdoor roth" option) with a provider that is also a TPA. Currently, I'm looking at Employee Fiduciary. I have a few questions about signing up.
1. My understanding is the 401k would be plan 2, with the SEP being plan 1. I know I'll need to "terminate" the SEP at Vanguard (even if they won't necessarily do anything). There will be no contributions to the SEP in 2020 and the plan will be "terminated" with the balance moved to the 401k. Can I terminate the SEP in the same year I open the 401k, assuming I make no SEP contributions that year (i.e., can the termination be retroactive to the first of the year). Or do I need to terminate the year before and/or amend to a prototype SEP (e.g., Schwab) as an intermediate step? There was a forum thread on this, but I don't think it quite covered this case:
2. Can the plan fees be paid as a business expense or do they have to be paid from contributions?
Thank you
