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SEP IRA recs?

1,249 Views | 11 Replies | Last: 5 yr ago by Long Live Sully
MAS444
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AG
Any recs for someone to talk to about starting an SEP IRA? I'm in Houston, if that matters. Thanks!
The Lurker
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AG
Here is a similar topic with some recommendations: https://texags.com/forums/57/topics/2946829
Long Live Sully
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AG
I set mine up with Fidelity. And I did one through Lending Club as well.
Endo Ag
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AG
Setup a solo 401k instead. If you grow until you hit the IRA phase outs, you'll be really glad not to have any money in traditional IRAs.
Long Live Sully
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AG
What is the reasoning on that?
Cow Hop Ag and Bayside both say they are conservatives.
Bayside admits to being pro choice.
Bayside calls Cow Hop Ag a liberal because he's a moral man.

/ Charpie 4-13-18
MAS444
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AG
I have full time employees so thought I couldn't do a solo 401k.
farmerjoe
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Can't do solo K with full time W2 employees. With a SEP you have to make the same percentage contribution evenly across the board to all employees up to 25% of compensation into each employees IRA account. At this point in time a SEP is the only thing you can do for tax year 2017 if you filed for an extension.

A Simple 401K may be suitable for you depending on employee numbers and amount of contributions you are wanting for them and for you.

Next step up from Simple 401K would be a regular 401K but then you run into limitations of amounts that you as the owner can contribute without being in violation of ADP or top heavy plan testing from the IRS. There are ways around this but it comes back to how involved of a plan you are wanting to create and what you are wanting to get out of it.
MAS444
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AG
Yep. Was looking for recs to help with a SEP IRA.
farmerjoe
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Sent you a PM with contact info. Feel free to reach out if just have questions or if you want to get it setup
Endo Ag
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AG
If you exceed the contribution limits for a deduction from an IRA, and also the Roth contribution limits, you have the opportunity to do what is known as a "back door Roth". It is legal and tested in the courts, but is certainly doing a bit of a work around the existing regulations.

It involves making a non-deductible contribution to your IRA, then in the same year roll that contribution into a Roth contribution. You pay the taxes as you would any other Roth. It allows high earners to still get that Roth contribution. One hurdle however is if you have any pre-tax money in other IRAs (traditional, simple, or SEP), then you have to pay pro-rata taxes on the rollover. It can be complicated to try to extract that IRA money. In may case I had to roll it into a 401k that had questionable investment options.

https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/

In this case, OP has employees and that complicates things and pushes this conversation beyond my competency.
Long Live Sully
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I was just asking why 401k instead of SEP. I am single member LLC S election and SEP made the most sense to me.

I wasn't asking about the backdoor aspect.
Cow Hop Ag and Bayside both say they are conservatives.
Bayside admits to being pro choice.
Bayside calls Cow Hop Ag a liberal because he's a moral man.

/ Charpie 4-13-18
farmerjoe
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AG
With a solo K in your situation you can stash away more pretax money at a lower level W2 compensation to yourself. The SEP allows for a deferral of 25% of compensation solely from the employer. With the solo K the employee can contribute up to 100% of compensation up to $18,500 and then participate in a profit sharing where the employer can next contribute either 20% or 25% to the plan as well.

Same maximum limit of $55,000K for both SEP and solo K for the combined employee/employer contributions. But the solo K gets you there paying less FICA and claiming less income.
Long Live Sully
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AG
Thanks..
Cow Hop Ag and Bayside both say they are conservatives.
Bayside admits to being pro choice.
Bayside calls Cow Hop Ag a liberal because he's a moral man.

/ Charpie 4-13-18
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