Maximum SEP contribution

Technical topics regarding tax preparation.
#1
Posts:
6043
Joined:
22-Apr-2014 3:06pm
Location:
WA State
Hi group,

I think I know the answer, but I can't find anything specifically on point.

I have a partnership and Partner A (70% ownership) has allocated earned income in excess of the compensation limit for her SEP. So, her SEP contribution is limited to $61K.
My question is regarding Partner B (30% ownership). I don't believe SEP rules limit her contribution to the same effective percentage as A. I believe they can elect to choose a lower contribution percentage for the company that corresponds with the max contribution for A, but alternatively they can choose the maximum contribution percentage, which would result in a proportionally higher contribution for B.

Anyone run into this before? Just want to ensure I'm providing the proper options. Thanks in advance.
~Captcook
 

Return to Taxation



Who is online

Users browsing this forum: Google [Bot], Google Adsense [Bot], JoJoCPA, Taxalmancer, Yellowdog and 117 guests