SEP IRA Account Opened in Business Entity Name of Emplyee Name

Forum|Forum|7 years ago
June 1, 2019
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Do I need to Open SEP IRA in business Entity Name or the Employee Name? My wife is working as an Employee for her S Corp? I am not sure if she opens the account in her name with her SSN how can I deduct this expense while filing Company's S -Corp's tax Return?

Thanks

Best answer by dmertz

SEP IRA accounts are individual accounts in the name of the employee. Check with the SEP IRA custodian for the custodian's procedure for the employer to open a SEP IRA account for the employee and for the employer to submit contributions. The account must be specifically established as a SEP IRA account, not an ordinary traditional IRA account.

The SEP IRA contribution will appear as a pension expense on the S corp's tax return, Form 1120S line 17. See the Instructions for Form 1120S: https://www.irs.gov/pub/irs-pdf/i1120s.pdf

D

dmertzAnswer

Employee

SEP IRA accounts are individual accounts in the name of the employee. Check with the SEP IRA custodian for the custodian's procedure for the employer to open a SEP IRA account for the employee and for the employer to submit contributions. The account must be specifically established as a SEP IRA account, not an ordinary traditional IRA account.

The SEP IRA contribution will appear as a pension expense on the S corp's tax return, Form 1120S line 17. See the Instructions for Form 1120S: https://www.irs.gov/pub/irs-pdf/i1120s.pdf