Ask the Experts!
The professionals at Advanced Underwriting Consultants (AUC) answer the tax questions posed by producers. Here’s the question of the day.
Question: My client already sponsors a SEP IRA at his business. Can he add a Section 412(e)(3) plan also without terminating the SEP plan?
Answer: The business owner will probably have to amend his SEP IRA plan document to accomplish his objective.
Here’s an excerpt from the IRS website:
If I have a SEP, can I also have other retirement plans?
You can maintain both a SEP and another plan. However, unless the other plan is also a SEP, you cannot use Form 5305-SEP; you must adopt either a prototype SEP or an individually designed SEP.
Have a question for the professionals at AUC? Feel welcome to submit it by email. We may post your question and the answer as the question of the day.