This is so helpful! I struggle with how I think of myself--owner or employee or both. I converted to S Corp and made myself the only employee, based on that I will get w2 for the first time in a long time. I also heard you say that the "company" contributes, so the monies should come from the company operating acct, not from my personal account, correct? I will lask my accountant for guidance on how to decide how much to contribute.
I would recommend looking at the 401k route. But it’s still possible to do a SEP if they havnt met a certain time period of being a full time employee. Definitely discuss with a financial brokerage for details of the full time time employee rule.
Hi! Contribution is taken from the business directly. The salary is only used to determine what the maximum contribution allowed is. Step 1) What is your total salary for the year that was paid on W2? Step 2) Multiply #1 by 25%. This is your maximum allowed SEP IRA contribution amount (be aware of maximum for the year) Step 3) Have the business send this money to the SEP IRA brokerage and make sure the contribution is applied to the correct year.
very nice explained.
This is so helpful! I struggle with how I think of myself--owner or employee or both. I converted to S Corp and made myself the only employee, based on that I will get w2 for the first time in a long time. I also heard you say that the "company" contributes, so the monies should come from the company operating acct, not from my personal account, correct? I will lask my accountant for guidance on how to decide how much to contribute.
Great info and breakdown. Very easy to follow and understand. Thank you!
Great video! I have a S corp business but I do have a few full time employees. What do you recommend instead?
I would recommend looking at the 401k route. But it’s still possible to do a SEP if they havnt met a certain time period of being a full time employee. Definitely discuss with a financial brokerage for details of the full time time employee rule.
Great explanation
Thank you, very helpful. Is the contribution taken from your salary you set up or from the business directly?
Hi! Contribution is taken from the business directly. The salary is only used to determine what the maximum contribution allowed is.
Step 1) What is your total salary for the year that was paid on W2?
Step 2) Multiply #1 by 25%. This is your maximum allowed SEP IRA contribution amount (be aware of maximum for the year)
Step 3) Have the business send this money to the SEP IRA brokerage and make sure the contribution is applied to the correct year.