401K (as employee) and SEP on SE income

Dec 17, 2013 1 Replies

Taxpayer has a 401K with employer. The maximum amount of $23,000 (includes catch up provision) has been withheld from paycheck and paid into the plan. The taxpayer also has SE income and would like to contribute the maximum amount of $51,000 to that plan (provided his SE income is high enough). Is this allowed? Or does he have to subtract the $23K from the maximum SEP contribution allowed?



Where would I find "proof" of this?



Thanks, Gary


You have two different employer plans. As such, your elective contributions to your employer's 401K do not count against your employer (you) contributions to the SEP-IRA. Your employer contributions to the SEP-IRA would only be limited by the taxable compensation and the $51,000 limit.

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