Retirement Account Question

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Sep 30, 2008 6:06 pm

Ok, I have been presented with a situation that might be so stupid, I don't even have an answer.


I have a self employed client that for 2007, had an AGI of $54,000.  He already funded a Roth IRA for 2007 with $4,000. 


His CPA tells me he can also do a SEP and has done his taxes to indicate an $11,000 contribution into the SEP.


I didn't think you could do a Roth and a SEP in the same year, am I missing the boat?  I asked CPA what section of the tax code it was and he said Section 408A.
 
Am I crazy or can this be done?
Sep 30, 2008 6:40 pm

There is no issue with doing both a SEP and a Roth.  The SEP is 100% employer money.  Even if it was a SAR-SEP, it wouldn't make a difference.  He'd still be able to fund his Roth.

Sep 30, 2008 6:42 pm

Yeah, I try to stay away from that SARs stuff.

 
Thanks, Anon...I knew it all along...it was me that was crazy.
Oct 1, 2008 9:23 pm

most of us "stay away" from SAR SEPS cause they cannot be done anymore, no new plans anyway.