5500 Preparer's Manual for 2012 Plan Years
The premier resource in the field of Form 5500 preparation, 5500 Preparer's Manual will help you handle the required annual Form 5500 filings for both pension benefits and welfare benefit plans.
Partners or members of an LLC taxed as a partnership are considered employees for retirement plan purposes, and thus cannot have individual SEP plans, according to the IRS. Only an employer can maintain and contribute to a SEP plan for its employees.
The IRS notes that, in addition to the partners, the partnership's SEP plan must generally cover all employees who have:
The plan may use less restrictive participation requirements to cover employees.
Under the SEP plan, the partnership contributes to each eligible employee's SEP-IRA, which each employee owns and controls. The partnership deducts plan contributions for employees other than the partners as a business expense on Line 18 of Form 1065, U.S. Return of Partnership Income and reports plan contributions for partners in Box 13, using Code R, on each partner's Schedule K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. Partners deduct plan contributions they make for themselves on Line 28 of their Form 1040, U.S. Individual Income Tax Return.
Source: IRS Retirement News for Employers, Spring 2011, May 17, 2011.
For more information, visit http://www.wolterskluwerlb.com/rbcs.
For more information on this and related topics, consult the CCH Pension Plan Guide, CCH Employee Benefits Management, and Spencer's Benefits Reports.
Visit our News Library to read more news stories.