Can I contributing to 401(k) solo and SEP for same employee Shareholder of S corporation?

Forum|Forum|6 years ago
December 7, 2019
1 reply
14 views

I have an S Corporation with gross payroll of 50K for me as, an only shareholder and employee I have deducted 18,500 salary deferral for 401(k) solo. The employee contribution to 401k would be 12,500 at 25%. My question is, in additions to this can I contribute $12,500 (25% of wages to SEP in the same year and deduct on my 1120S?

ProSeries Professional

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Best answer by sjrcpa

No. Your maximum annual addition to all retirement plans is 25% of salary.

sjrcpaAnswer

Level 15

No. Your maximum annual addition to all retirement plans is 25% of salary.

The more I know the more I don’t know.

A

ABCD149Author

Level 2

This is from https://www.irs.gov/retirement-plans/how-much-salary-can-you-defer-if-youre-eligible-for-more-than-one-retirement-plan

Deferrals limited by compensation
Although plans may set lower deferral limits, the most you can contribute to a plan under tax law rules is the lesser of:

the allowed amount for that plan type for the year, or
100% of your eligible compensation defined by plan terms (includible compensation for 403(b) and 457(b) plans).

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