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Solo 401k Contributions FAQ – Can I contribute to both my solo D401k and SEP IRA?
QUESTION:
Can I fund my before-tax 401 K and my Sep all in the same year?
RESPONSE:
One can only contribute to both a Solo 401k and a SEP IRA for the same year if the SEP IRA is not a safe harbor SEP IRA (you would need to check with the SEP IRA provider to see if it was set up as a safe harbor SEP IRA). If the SEP IRA is a safe harbor SEP IRA (i.e. the SEP IRA provider used Form 5305 to set up the SEP IRA), a self-employed person can’t make contributions to the SEP IRA and a Solo 401k for the same year. Learn more: https://www.mysolo401k.net/sep-ira-vs-solo-401k/
Moreover, there is not contribution benefit of contributing to both a Solo 401k and SEP IRA for the same year as the contributions are aggregated for purposes of the contribution limits.
