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Once the money is withdrawn, I can't see any difference, so I am going to assume you mean mixing a SEP account and an IRA account. The basic problem is once funds are mixed or comingled, it is not possible to separate the funds, at least that is the government's position. So if you comingle, you are giving up the right to do something specific with your IRA funds that you could not do with your SEP funds of visa versa.

Today from my view point there are no meaningful differences or advantages for me. However Congress can pass laws to change things. For example I don't know if you can transfer SEP funds into a Roth IRA. You can transfer other IRA funds into a ROTH IRA.

If you comingle SEP and IRA funds, and you can not convert a SEP to a Roth IRA -- then the comingling or mixing has prevented you from converting any of your funds into a Roth IRA.

gordon
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