I have two jobs. Can I contribute to two SIMPLE IRA plans?

By Denise Appleby AAA
A:

If there is no relationship between the two companies - the only link is that the employee works for both of them - then the employee can make salary deferral contributions up to an aggregate amount of $20,500, with no more than $13,000 to one of the SIMPLE IRAs.

The maximum aggregate contribution for an individual who reaches age 50 by the end of the year is $20,500. SIMPLE IRAs are subject to limitations established under IRC§ 402(g), which limits salary deferral contributions to $15,500 for 2007. Therefore, an individual who participates in multiple retirement plans can defer no more than $15,500 for 2007 (regardless of the number of plans in which he or she participates) plus catch-up contributions of $5,000.

On the other hand, if the two companies are affiliated or related in any way - if there is any one party that has ownership of both companies, whether in part or 100% ownership - or if there is any relationship that would constitute an affiliated service group, then the maximum amount that the individual can defer to both SIMPLEs may be limited to $13,000.

To learn more, check out the SIMPLE IRA tutorial.

This question was answered by Denise Appleby (Contact Denise)

RELATED FAQS

  1. Does it make sense to convert a Traditional IRA to a Roth when the market’s down?

    If your modified adjusted gross income (MAGI) is $100,000 or less and you are not married filing separately, you may initiate ...
  2. Can I roll a Traditional IRA into a 529 college account for my grandchild?

    A 529 plan, also known as a "qualified tuition program", is an investment vehicle that allows individuals to save for education ...
  3. Can I still set up an SEP if one of my employees refuses to participate?

    You can establish the SEP IRA, even if the employee refuses to participant. However, you would need to establish an IRA for ...
  4. I want to close my IRA account. What percentage will I lose to tax?

    You can move the amount by means of a trustee-to-trustee transfer to another IRA, or roll over the amount to your 401(k). ...
RELATED TERMS
  1. Gold IRA

    Definition of Gold IRA
  2. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  3. Death Master File (DMF)

    Also known as Social Security Death Index. A list of people whose ...
  4. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...
  5. Peri-Retirement

    A term for the period of time leading up to actual retirement. ...
  6. MyRA

    A new tax-advantaged retirement account that President Barack ...
comments powered by Disqus
Related Articles
  1. Impact Of Continuing To Work In Retirement ...
    Retirement

    Impact Of Continuing To Work In Retirement ...

  2. Independent 401(K): A Top Retirement ...
    Retirement

    Independent 401(K): A Top Retirement ...

  3. After-Tax Balance Rules For Retirement ...
    Taxes

    After-Tax Balance Rules For Retirement ...

  4. Guide To 401(k) And IRA Rollovers
    Retirement

    Guide To 401(k) And IRA Rollovers

  5. Should You Convert Your IRA?
    Retirement

    Should You Convert Your IRA?

Trading Center