User login
Recent comments
-
5 weeks 1 day ago
-
12 weeks 6 hours ago
-
12 weeks 5 days ago
-
13 weeks 6 hours ago
-
13 weeks 4 days ago
-
13 weeks 4 days ago
I own a business as a proprietor and have had a SEP for several years. Recently I opened a Solo 401k as well. It is only me in the business. Is it ok for me to contribute to both during the year? How do I calculate the contribution limits for one or both of them?
- Login to post comments
- Flag as offensive
Top Contributors
| User | Points |
|---|---|
| jmrigtrup | 900 |
| termite | 780 |
| AlpinaInvestments | 440 |
| lillianxc | 420 |
| jacqueldz | 340 |
| warrenwge | 310 |
| personalfinanceblogs | 265 |
| emmyross | 245 |
| finSIGHT | 200 |
| Mom of Seven | 180 |
Earn Points for Speaking Up!
Join the conversation, earn points and become a top contributor! Get started by registering and logging in. Next, create your profile and add your picture.
Tell us what’s on your financial mind or comment on a recent blog. Earn points by inviting a friend and more points if they join the conversation.
Latest Status Updates
| cocohuang 40 weeks ago |
|
fab92876 paying off debt 42 weeks ago |
|
DATFinanclPlanner President/CEO of Innovative Financial Group, LLC. Full-service planning, insurance, investment, advisory firm located in Hillsborough, NJ! 44 weeks ago |
|
john d dawson paying off debt 44 weeks ago |
|
jeana Time may be gone, the future is unknown. Our country is in trouble. It will do what ever it takes to save itself. 45 weeks ago |
|
kbowden17 Am needing to make more money in my position... 45 weeks ago |
To me, the most important difference is the contribution limits. The max for a SEP-IRA is up to 25% of compensation with a cap of $44,000. On the other hand a Solo 401(k) allows profit sharing contributions of up to 25% of compensation plus tax-deductible salary deferrals to the plan of up to $25,000. The cap is the same at $44,000.
So while the caps are the same, you can make very little self-employed income and basically defer it all, which you can’t do with the SEP-IRA. This gives you that added flexibility which is especially useful for those who have some self-employed income as secondary income and want to get the most tax advantages. For example, if you made $25,000 of eligible compensation, you could sock all $25,000 of it away with a Self-Employed 401(k), but only $7,500 with a SEP-IRA.
Insurance Quote
I found a great resource for all things personal tax and finance related. It also provides you with important stock trading tips as well as pieces of advice from experts in the field of money management. In this case I believe if both are exclusive entities you should be ok. As far as calculating the contribution limits, don't waste your time with a finance representative, there are enough places on the internet to find help. Good luck!
Here is a great calculator on the site to help you determine maximum contribution limits to 401k, SEP and SIMPLE IRAs.
click here