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I am a 2 person LLC (partnership) with only 2 part time

employees (15 hours per week...
I am a 2 person LLC (partnership) with only 2 part time employees (15 hours per week each) and wanted to know what would be the best way to contribute to a retirement plan for the owners only?
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Answered in 7 minutes by:
11/14/2017
Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 33,359
Experience: Personal Investment, Tax Preparation
Verified

If you want to set a retirement plan under the partnership - the contribution MUST be made for all eligible employees (including partners).

You will not be able to have the partnership making contributions on behalf of partners only...

But based on self-employment income passed to you as a partner on K1 - you may make contribution into your own IRA or Roth IRA account.

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Customer reply replied 9 months ago
At 15 hrs per week I wouldn’t think the employees would be eligible.

We are talking about nondiscrimination testing which is required for qualified retirement plans to ensure that benefits under the plan do not discriminate in favor of officers, owners, shareholders, employees in authority of other employees or any other employee classified as a highly compensated employees (HCEs).

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In order to be eligible, employees must meet the particular eligibility criteria implemented by that employer.

Employees must be aged 21 or older and must have served at the company for a minimum of one year for 401k plan and two years for other types of retirement plans..
One year of service is considered 1,000 hours of work performed for the company during the year.

After teh employee becomes eligible - it would not matter how many hours he/she is working.

Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 33,359
Experience: Personal Investment, Tax Preparation
Verified
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