SIMPLE-IRA + SE-401K ?


N

nearly_blind

I've had a SE-401K for several years which I fund via sole-prop
consulting
income at the maximum deferral + 25% of profits (e.g. 15500 + 25% for
2007).
I also have a small C-corp that is a totally separate business
with about 5 employees which currently has no retirement plan.
If I establish a SIMPLE-IRA for 2008 for the C corp and participate
at the maximum deferral + company match
can I still contribute to the SE-401K up to the maximum levels such
that the total
deferral of both plans is less than the maximum 401K deferral (which
is more
than the IRA maximum deferral) ?

E.g. using 2007 limits
If I contribute a maximum $10.5K deferral + company match for the IRA
can I still contribute a $5K (15.5K - 10.5) deferral to the SE 401K +
25% profits?

Is there any dependence or interaction between the maximum IRA comany
match
and the 401K 25% profit sharing (this is unlikely but it doesn't hurt
to confirm)?

thanks.
 
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P

Phil Marti

I've had a SE-401K for several years which I fund via sole-prop
consulting
income at the maximum deferral + 25% of profits (e.g. 15500 + 25% for
2007).
I also have a small C-corp that is a totally separate business
with about 5 employees which currently has no retirement plan.
If I establish a SIMPLE-IRA for 2008 for the C corp and participate
at the maximum deferral + company match
can I still contribute to the SE-401K up to the maximum levels such
that the total
deferral of both plans is less than the maximum 401K deferral (which
is more
than the IRA maximum deferral) ?
Yes. The SIMPLE deferrals are a subset of your total deferrals, so as long
as your total deferral from all sources doesn't exceed $15,500, you're fine.
The profit sharing limits are per individual per employer, not per
individual across all employers.

See Pub 525.
 

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