Is there a combined S limitation for SEP contributions?
March 5, 2003
Subject: SEP limit
Date: Fri, 21 Feb 2003
You said, "There is an overall limit on SEP contributions. The total of nonelective contributions to a SEP-IRA cannot exceed the lesser of 15% of the employee's compensation or $35,000 for 2001, 25% of the employee's compensation or $40,000 for 2002."
Can a small business, Husband and Wife Sub S Corp, contribute $40,000 for each of them on both husband and wife's separate salaries or are they limited to $40,000 combined because of the Sub S limitation? Has this changed in recent years?
Date: 28 Feb 2003
The limitation is separately computed for the husband and wife employees. There isn't a combined S limitation.
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