Two plans 401 k and SEP

[caryn22359]

I have a s corporation and a schedule c. I am the only employee on my corporation.

The 2 business are related and I own 100% on both.

Question: I already have an SEP plan on my schedule c. Can I establish a 401K salary deferral plan on my S corporation?

I am over 50. What are the limits.

Thank you for your help.

[ETA Consulting LLC]

Sure, but it is rather redundant. You can set up a solo K plan and fund both your deferral (up to $23,000) and an Employer Contribution (to the extent you do not exceed the 415 limit). You don't need two plans to do that.

Good Luck!

[Bird]

Correct. If you really want to minimize your tax filings, having a combination will help you b/c the 401(k) will only hold deferral contributions, and will take longer to get to the $250K minimum filing for a 5500-EZ (or SF). Note that you are supposed to file a 5500 in the final year of the plan no matter the amount of assets.

[masteff]

What effect does the common 100% ownership have on the rule about not having a 5305-SEP and another qualified plan in same year? In my experience, individually designed SEP's are not very common, making it likely the OP has a 5305-SEP. So the rule should at least be mentioned as a caveat before a 401(k) gets set up.