sole proprietor incoorporated

[Guest AAASIMON]

sole prop. had a sep-ira(not irs model)which incorporated in year 1998.The corp. established a money purchase & profit sharing plan using the corp's EIN #. Can the sole owner & employee contribute to the corp's plan using both the w-2 wages & sched c income as "earned income". Is any amend. required? Furthermore, can the contribution of sched c be made by the due date of personal return?

[Ervin Barham]

Don't mix/confuse the two entities. The corporation's plans can be contributed to solely based on the W-2 issued by the corp. Check your plan document in case a slightly different definition of comp. other than W-2 is used. Schedule C income (earned income) is solely for the sole proprietorship and doesn't come into play in the corporation's plan.

The corporation's contribution was due March 15, unless an extension was obtained.

In addition, you need to check both plans and the SEP/IRA to insure that the Section 415 limits (25% or $30,000) are not exceeded.

Since it is hard to provide anything specific without further facts, you might check with a good accountant or benefits person in your area for help with this one.