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My husband and I are owners of LLC. We each own 50%. This…

My husband and I are...
My husband and I are owners of LLC. We each own 50%.
This year our ordinary income is $24,393.00
We would like to make contribution to retirement account .
How much can we contribute and to which account 401(k) ? or SEP ?
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Answered in 8 minutes by:
3/14/2018
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,735
Experience: Taxes, Immigration, Labor Relations
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You will be ONLY able to make contribution into retirement plan if that income is classified as self-employment income.

Contributions must be made by the LL - I assume it is classified as a partnership.

Maximum SEP IRA Contribution $4,533.94

Maximum SIMPLE IRA Contribution $13,160.28

Maximum Individual 401k Contribution $22,533.94

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Customer reply replied 1 month ago
It is classified as self -employment income .
How you come up with 401k contribution amount ?
Can I make $11,266.97 contribution to my self 401K ? and 11,266.97 to my husband 401k ?

If this income is equally divided between you and your spouse - these contribution limits will be divided as well.

401k contribution limit have two componets

-- employee elective deferral - up to $18,000 - but not more than compensation

-- employer's matching contribution - 25% of compensation

Total limit for all contributions - may not be more than compensation.

With your Net self-employment Earning (before qualified plan deduction) $24,393 - the compensation is calculated using a special worksheet to be comparable with income from wages.

But again - that will be calculated separately for each partner - and separate contributions should be made.

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Customer reply replied 1 month ago
I would like to make equal separate contribution .
Can you send me this special worksheet so I have documents how I came up with this amount ?
I will pay extra for that .

Making manual worksheet - that might be time consuming...

I may suggest this online calculator

https://sepira.com/calculator.html

You will enter your specific information - and when you click "Calculate" - you will have document created - which may be used for your records.

Let me know if that works for you.

Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 32,735
Experience: Taxes, Immigration, Labor Relations
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Lev and 87 other Tax Specialists are ready to help you
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Customer reply replied 1 month ago
will work. thank you .
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