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Another 401k/IRA question/feedback requested
Old 01-24-2015, 10:52 AM   #1
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Another 401k/IRA question/feedback requested

Sorry if this was answered previously....

For 2015, currently a fulltime employee as a w-2 wage earner where I plan to contribute $18k for the year (contribution limit).

I have an opportunity for an assignment under my LLC. This could result in $30 - 60k for the year that can be added to retirement savings.

What is the best way to reduce taxes and/or defer into a IRA or 401k?

SEP-IRA? Vanguard Simple 401k? Small Plan 401k?

Can I contribute to an employer's 401k ($18k) and my own SEP-IRA (employer 25% of comp up to $53k and employee contribution $5.5k) during the same year?

So, on LLC income of $53k, I could make employer contribution of $13.25k and employee contribution of $5.5, for a total of $18.25k.

Is this allowed? Any other advice? Thanks for your feedback.

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Old 01-24-2015, 11:01 AM   #2
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Not a tax expert, but I believe you can save the entire $53K in a SEP-IRA. You should still be able to save the $18K in your employer's 401k program, and additional $6K if you are over 50. The $5.5k for IRA is subject to income limitations, but if below that value for 2015 then I would save that as well, most likely as Roth.

My logic is that these are two different income types. Unless there is an IRS limit for combined, or can take the max of one income stream, you can essentially save all of your side self-employed income.

Check with tax laws or a person more knowledgeable then me. Also a lot of good kknowledge on the board here so hopefully someone can contribute to this discussion.
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