4 ms·

Thanks for the information. I actually didn't know about the individual 401k. Using the individual 401k would allow me to make a larger contribution ($58k) than

Thanks for the information. I actually didn't know about the individual 401k. Using the individual 401k would allow me to make a larger contribution ($58k) than my current SEP (income does not max out the 25% limit). However, the downside with the individual 401k is that I cannot expand and hire full-time employees. Do you have to know if I can convert my SEP into an individual 401k?

wikibob 5y ago
See this amazing chart from the IRS on allowable source and destination's for rollovers: https://www.irs.gov/pub/irs-tege/rollover_chart.pdf https://www.irs.gov/pub/irs-tege/rollover_chart.pdf It does appear you can roll a SEP-IRA over to a "Qualified (pre-tax) Plan" which footnote 1 indicates includes 401K. How much do you have in the SEP currently? You could roll $6,000 of it per year over into a Roth IRA (held at Vanguard for example). Remember, make sure not to end up with money in a traditional IRA, or the tax situation for backdoor contributions becomes much more complex.