SEP Contribution Partners in Partnership?
Hi-
Client is a 50% owner of a partnership that sells photography classes online. The client also has their own photography business that is an LLC. Does being a partner in the photography business exclude them from forming and making a SEP contribution? If so, does it exclude them from forming and making a contribution on both the partnership income and their LLC income?
Thank you so much! This discussion forum is amazing!
Permalink Submitted by Treavor Dodsworth on Tue, 2019-01-15 16:58
Let me expand on this. Per the IRS website: – Can each partner in a partnership maintain a separate SEP plan? No, only an employer can maintain and contribute to a SEP plan for its employees. For retirement plan purposes, each partner or member of an LLC taxed as a partnership is an employee of the partnership.Does the fact that they are a 50% owner of a partnership in a related business exclude them from making SEP IRA contributions on a separate LLC?
Permalink Submitted by Alan - IRA critic on Tue, 2019-01-15 18:35
There has not been an answer posted because your question gets into the highly complex controlled group, affiliated service groups and attribution rules. For someone to answer whether the individual LLC can be a separate SEP or must be included in the partnership SEP, they would need to fully understand these rules. That said, how exactly these two entities inter relate with each other and WHO is the other partner may be matter in determining the answer.