Expert: Allen - 11/29/2006

Question
Can a person have two 401(k) plans because they have two jobs with 2 separate companies where they receive W-2 wages?  Example, my husband works for my company and earns $15K and he is also a partner in an LLC.  Can he defer $15K from his own company and then $15K from my company.  My CPA says Yes.  My Financial Planner says no.  Please help!

Answer
You may want to hire a new accountant.

The 401k limit is for an individual. If your husband contributes more than $15,000, the IRS will probably pick it up and the tax consequences are not pretty.

I'll add something which may complicate things. So write back if you have an additional question. Your husband can participate in a profit sharing plan established by each company as long as he doesn't have a substantial ownership interest in both. In this case he can receive employer contributions in both plans (but he can't double up on salary deferrals).