Advanced Underwriting Consultants

Question of the Day – February 27

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.