| Can I make Employee Contributions to SEP? |
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sami
New Poster
Cash: $ 0.45
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Joined: 19 May 2007
Location: Colorado
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| Can I make Employee Contributions to SEP? |
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My position was eliminated in April, and my employer did not yet make SEP contributions for me this year, but promises to do so. Can I make employee contributions after the fact for my SEP, prorated through April? My new job has a one year waiting period for 401k contributions, and I don't want to get behind on retirement planning!
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Sat May 19, 2007 6:42 pm |
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efflandt
Senior Member
Cash: $ 80.45
Posts: 401
Joined: 25 Apr 2005
Location: Elgin, IL USA
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Were your contributions to your SEP made as "elective deferrals" (deductions from your paycheck)? Because instructions for an SEP contribution form I found at http://www.irs.gov/pub/irs-pdf/f5305ase.pdf says: No deferral election may be based on compensation an eligible employee received, or had a right to receive, before execution of the deferral election.
So if your contributions were only allowed through payroll deductions, you cannot go back and change that now. Although, your employer has up until next April to make their contributions. So you may not want to transfer or close out that account until they do.
But if you do not have a Roth IRA, it may be a good time to start one and/or build up an emergency fund. Then double up (or max) your inital 401(k) contributions when eligible. Evenually you will also need to decide if you want to transfer the SEP to your new 401(k) or an IRA (more investment options). IRA money can be converted to the Roth (pay tax during conversion, but no future tax on Roth gains).
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Sun May 20, 2007 1:34 pm |
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sami
New Poster
Cash: $ 0.45
Posts: 2
Joined: 19 May 2007
Location: Colorado
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| SEP contributions |
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My income is just above limits for Roth. My SEP contributions were made by my employer, but not relected in my paychecks.
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Sun May 20, 2007 11:30 pm |
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