Hello!
I am a small business owner who chose a SEP IRA plan a few years ago because it seemed like the best (and easiest) way to get going. At the time I had no employees, just contractors. I have been able to put 25% of my W-2 income.
This year, I now have an employee - she has been with me for a few years as a contractor, but I think I now have an issue since she is now an employee.
I am trying to figure out the best course of action, because I don't want to keep the SEP IRA if it is only employer contributions, and I would be required to match the current contribution level I've set -- so I would now have to do 25% of her salary as well.
-I cannot do a solo 401K
-A regular 401K seems complicated and daunting
-A Simple IRA seems to possibly be the best move...
A few drawbacks would be that the current max for a Simple IRA would mean I am contributing slightly less than I am now with my SEP option, but I can perhaps just invest the difference in other ways.
Potentially related ... I am also trying to figure out if I can (or should) try and do a Backdoor Roth if I have a SEP or Simple IRA. It seems like this has major tax complications and so that might not be an option of making up the difference (or just having that option period).
I am a small business owner who chose a SEP IRA plan a few years ago because it seemed like the best (and easiest) way to get going. At the time I had no employees, just contractors. I have been able to put 25% of my W-2 income.
This year, I now have an employee - she has been with me for a few years as a contractor, but I think I now have an issue since she is now an employee.
I am trying to figure out the best course of action, because I don't want to keep the SEP IRA if it is only employer contributions, and I would be required to match the current contribution level I've set -- so I would now have to do 25% of her salary as well.
-I cannot do a solo 401K
-A regular 401K seems complicated and daunting
-A Simple IRA seems to possibly be the best move...
A few drawbacks would be that the current max for a Simple IRA would mean I am contributing slightly less than I am now with my SEP option, but I can perhaps just invest the difference in other ways.
Potentially related ... I am also trying to figure out if I can (or should) try and do a Backdoor Roth if I have a SEP or Simple IRA. It seems like this has major tax complications and so that might not be an option of making up the difference (or just having that option period).
Statistics: Posted by BriMarie — Sat Sep 07, 2024 12:09 pm — Replies 4 — Views 152