rfahey Posted October 9, 2012 Share Posted October 9, 2012 I have an integrated SAR SEP PLan. THe owner and his employees do salary deferrals ( subject to the 1.25% test ) The owner then contributes 3% for himself and his employees. He is self employed and his income is capped at the $245,000. ( his actual Schedule C income is over $300,000 ). Because the plan is integrated I am claculating his excess comp over the TWB at $138,200 ( 245,000 ,imus 106,800 ). If you multiply this by 2.7% you get an additional allocation for him of $3,631. Does this make sense ? Are there any on line calculators out there that can do this calculation ? American Funds does not have one . THank you, Bob Link to comment Share on other sites More sharing options...
Gary Lesser Posted October 9, 2012 Share Posted October 9, 2012 Your approach does work, but the excess percentage could be 3% (rather than 2.7%). If the base percentage is 3%, then the excess percentage (disparity rate) is also 3% (the lesser of 5.7% or the base percentage). If you are using the four step method, and only want to contribute an additional 2.7%, that's fine. It appears that STEP 2 (were everyone gets up to 3% of excess compensation) was not applied (before the 2.7% factor in STEP 3). The four STEP allocation method does not work backwards and is used for allocating a dollar amount among all participants. For 2011, try allocating $11,496 (plus 3% on nonowner compensation). QP-SEP Ilustrator Software may be useful in allocating contributions. http://www.benefitslink.com/GSL/index.html Link to comment Share on other sites More sharing options...
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