Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0
Before July 2000, my wife conducted business as a sole-proprietor and will have net income on schedule C. She has a SEP-IRA to which she has contributed in prior years.

In July, my wife and I formed a two-member LLC with two additional employees. We established a SIMPLE-IRA plan for the LLC. The company will have a net income for 2000.

1. Can she make her 15% (really 13.04%) contribution to the SEP based on her schedule C income and still use the SIMPLE plan to make a $6000 (plus 3% of her share of LLC profits) contribution?

2. If she does make a contribution to the SIMPLE account, where do the amounts go on the tax forms? For example, say that the LLC had a net income of $10,000 that was passed through to her. She could contribute $6000 plus 3% of the $10,000 or $300 for a total of $6300. She would list the $300 on the 1065 as retirement plan expenses and the $6000 on our 1040 as the SIMPLE IRA contribution. Is this thinking correct?
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.