\
- quote -

Thanks. When and how did I sign such a form? I have no record of it. To open
my SEP account, I went on the Vanguard web site and opened an account. Then
I put money in it, and reported it on my income taxes. In looking at the
form on the IRS web site, it says not to file it with the IRS. So who needs
a copy of it then besides me?

Miss Livvy wrote:
- quote -

You may remember from opening your SEP IRA that there really are two
pieces to it: the SEP itself, and your IRA.

You first adopt the pension plan on behalf of the employer sponsoring
the plan, which is you, if you're self-employed. Most people use either
the IRS model plan (IRS Form 5305-SEP) or a prototype plan from their
custodian. If this step didn't make an impression it's because you
basically signed a form and stuck it in a folder, that's about all there
is to it.

After establishing the penion plan, you then opened a SEP-IRA that
accepts the contributions. Really that's just an IRA but because it's
contributed to under a SEP plan the annual contribution limits are
higher. You opened that with some custodian and they coded it as a SEP
so they wouldn't freak out if you deposited $10k in it. But again -
really that's just an IRA, and you could use it for a traditional IRA
contribution as well. These accounts aren't titled to the employer, but
rather to the employee, and are fully vested right from the get-go.

With an S-corp you now have a new entity acting as employer, and you are
its employee. An authorized individual of that entity will need to adopt
a new SEP on behalf of that corporation. That could be as simple as
again signing a form and sticking it in a folder (probably with a board
resolution authorizing it). But at this point depending on why you went
S-corp you should read the model plan over and make some decisions. If
you have or plan to have employees then this might not be the plan you
want to adopt, and you might not want to go with a SEP at all.

If you do adopt a new SEP, you probably don't need to open a new SEP IRA
but you should confirm that with your custodian. With contributions
coming now from the S-corp they no doubt need to at least be informed
about the change. But it's still going to be essentially an IRA titled
in your name.

Because you're looking at this anyway you might consider one of the solo
401k plans. I've been amazed how much these have been simplified in the
past couple years. The contribution limits on them are higher than with
a SEP and the old arguments about cost and complexity with 401ks have
improved quite a bit. I know (thanks to a prior post on this group) that
Fidelity offers plans at low or no cost, and there are others.

I highly recommend you take a few hours to read: Nolo Press, "Creating
Your Own Retirement Plan" - www.nolo.com It does a great job of layout
out the different plan options, and how they interact with your other
retirement savings.

-Tad

Elizabeth Richardson wrote:

- quote -

The answer I give my clients is generally that there is no TAX
reason why a single account can't be used, but some custodians
have their own rules in this regard. Thus, you must contact the
custodian in question to see if they have any special
(non-tax-code-inspired) requirements.

If that's the answer that the accountant noted above gave in this
case, then he gave "good" advice.

MTW

Miss Livvy wrote:

- quote -

Assuming that all of the money in the original account came from
deductible contributions, and especially NOT from "conduit"
rollovers, there is probably no TAX reason why you can't continue
to use the same account. However, some custodians have their own
rules on this.

MTW

"Miss Livvy" <XeveryidiwantistakenX[at]yahoo.com> wrote in message
news:QCM2e.8103$H06.3312[at]newsread3.news.pas.earthlink.net...

My accountant told me to ask my brokerage firm, and my
- quote -

I don't have the answer, but if I were in your position and my accountant
couldn't answer this question, I'd be looking for a new accountant.

Elizabeth Richardson

You can keep the SEP, in fact you may be able to save more and rollover the
old SEP into a Solo 401k where you put aside over 42k.

"Miss Livvy" <XeveryidiwantistakenX[at]yahoo.com> wrote in message
news:QCM2e.8103$H06.3312[at]newsread3.news.pas.earthlink.net...
- quote -

I have a SEP IRA from being a sole proprietor. I recently incorporated, and
I now want the S-Corp to contribute to a SEP on my behalf. Can I direct the
money into the same account, or do I have to open a new SEP account using
the S-Corp's Tax ID? My accountant told me to ask my brokerage firm, and my
brokerage firm told me to ask my accountant. So I am now asking the
internet.

TIA