Partner SEP Contribution

[mjf06241972]

Someone would like to set up a SEP for their business for 2018 (by 4/15/19.)  It is 2 partners only and one partner wants to max out SEP but other one wants to put in less.  Is there a waiver form or something that can be done to have different contribution amounts since they are both partners and no non owner employees?  Thank you.

[shERPA]

No.  SEP contribution must bear a uniform relation to compensation. 

[Mike Preston]

1 hour ago, shERPA said:

No.  SEP contribution must bear a uniform relation to compensation. 

Awww, maybe permitted disparity to the rescue? Unlikely. 

[justanotheradmin]

Good thought, but unlikely. The IRS Form 5305 doesn't allow integration with SS. Which doesn't necessarily mean it's not allowed at all (I don't have a cite to the SEP rules to know). 

https://www.irs.gov/pub/irs-pdf/f5305sep.pdf

SSI also doesn't help if the partners have similar comp. They would end up with the same amounts. 

[shERPA]

Yup, PD won't likely do it.  Tell them to compromise on a % of pay they can both live with for 2018, then sell them a 401(k)/PS for 2019.  

[PensionPro]

How about an IRA contribution for 2018?

[mjf06241972]

Thanks everyone.  I agree with all.  It was call I got from CPA.  They want more than IRA deduction.  Meeting with them after 4/15.  They definitely need the 401k/PSP flexibility.