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HCE compensation W-2 vs. 1099 income


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Guest TLCPension
Posted

I have a client who earns a salary of $89,000 in a corporation. She also earns in excess of $100K as commissions and reports it on a 1099. Can she do this and still participate in the 401(k) and setup a SEP based on her 1099 income? If so, what are the restrictrictions, etc. I should be looking for with this issue.

Posted

Assuming this arrangement is being legitimately reported, the answer is yes. If she has >50% ownership in the corporation, there may be 415 issues, but otherwise she can have at it.

"What's in the big salad?"

"Big lettuce, big carrots, tomatoes like volleyballs."

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