Handling SEP IRA when terminating S Corp (w/ no employees)

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Investtoski
Posts: 31
Joined: Fri Jun 06, 2014 8:17 am

Handling SEP IRA when terminating S Corp (w/ no employees)

Post by Investtoski »

If an S Corp with no employees beyond the owner is dissolved, can the owner's SEP IRA remain a SEP (assuming no future contributions) indefinitely or must it be changed to a tIRA?

It would seem cleaner to change to a tIRA rather than leave as a SEP which could potentially cause confusion down the road.

Custodian said change wasn't required but I was looking for a reality check.
fabdog
Posts: 1357
Joined: Wed Jan 16, 2013 1:59 pm
Location: Williamsburg VA

Re: Handling SEP IRA when terminating S Corp (w/ no employees)

Post by fabdog »

from the IRS FAQ's

https://www.irs.gov/retirement-plans/re ... a-sep-plan
If I go out of business or my employee terminates service, can the amount in a SEP-IRA be left untouched?

Yes.
So you can leave it... but to your other point... do you want to? It may be simpler for you to roll it over...

Mike
Lee_WSP
Posts: 3445
Joined: Fri Apr 19, 2019 5:15 pm
Location: Arizona

Re: Handling SEP IRA when terminating S Corp (w/ no employees)

Post by Lee_WSP »

It's super easy to transfer/convert, but just as easy to leave it alone as well. I'd leave it alone if you don't have a TIRA account already.
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