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I recently set up a SIMPLE-IRA account at an online brokerage. I have two S-Corps that pay out SIMPLE-IRAs to its employees.

Can I distribute money from both S-Corps to the same SIMPLE-IRA account or do they have to be distributed to individual SIMPLE-IRA accounts?

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    Edited the title: Those aren't distributions, they're contributions. Distribution is when the money comes out of the retirement accounts. Here is the best source (the IRS) for information about tax advantaged retirement plans. – Xalorous Mar 2 '17 at 0:54
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    Please do not roll back the edit. @Xalorous comment and edit is correct. It would be better if you explain why you feel this is not so. – JoeTaxpayer Mar 6 '17 at 2:29
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Each S-corp is bound by its own plan documents, which typically do not limit or dictate where the investments are held. Your brokerage account has no tie to the company from which the funds come, however, you are still subject to maximum SIMPLE contribution rules and cannot exceed the $12,500 (if under age 50) COMBINED contribution for any and all companies. Be careful about co-mingling from both companies as there are penalties for early withdrawals made within 2-years of participating in the plan. If you started them both at the same time it's not an issue.

  • Does the $12,500 combined SIMPLE-IRA limit affect other retirement investment instruments? For example, if I elected to have company one provide a SIMPLE-IRA and company two to provide a SEP-IRA, is the cumulative contribution bound by the $12,500 limit or is the SEP-IRA considered a separate entity? – Lloyd Banks Mar 1 '17 at 23:59
  • Can you add citations to your answer? It would be helpful to understand the basis for your reasoning. – gaefan Mar 5 '17 at 4:53
  • @LloydBanks The IRS rules for retirement accounts describe the contribution limits. On some plans, the actual limits are on how much of the contribution is tax exempt, not how much you can put into the plan (Traditional 401k). On others, the max you can put into the plan is due to the fact that the plan allows untaxed growth (Roth IRA). Go to the source. The IRS rules are understandable, just takes patience. – Xalorous Mar 10 '17 at 21:35
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Those aren't distributions, they're contributions. Distribution is when the money comes out of the retirement accounts.

Here is the best source (the IRS) for information about tax advantaged retirement plans.

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