SIMPLE IRA AND PARTNERSHIPS

[Felicia]

Partnership set up SIMPLE IRA a few years ago. An employee became a partner in June of 2004. Are salary deferral contributons made for 2004 before he was a partner OK? Also, can he contribute to the SIMPLE IRA after he became a partner? If so, would the contributions after June be based on his "earned income " while a partner? And, should all contributions be aggregated to ensure the limits were not exceeded?

[SoCalActuary]

Let me assume for the moment that the new partner gets a W-2 for pre-partner income and K-1 for later income.

If the partner contributes to the SIMPLE, these amounts will not appear in the W-2.

To answer your questions then, 4 yes's IMHO.