Self Employed 403(b)(9)?

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masteraleph
Posts: 821
Joined: Wed Nov 04, 2009 8:45 am

Self Employed 403(b)(9)?

Post by masteraleph »

My wife recently completed her ordination. She's now working as a contractor for a seminary that grants ordination, helping instructors there to develop their courses, as well as occasionally as a chaplain for a nursing home (I need to look at whether this is technically a W2 or 1099 position, but my understanding is that as a non-church organization, it wouldn't matter for the purposes of joining a 403b9). We're trying to figure out the logistics of setting up a 403b9 for her, and have a few questions- it's hard to find information online. She is not receiving parsonage, which should simplifying things somewhat. For reference, the plan she's looking at joining is here: https://rabbisretirementplan.org

1) It's our understanding that she could participate in a 403b9 as long as she's exercising her ministry, even as self employed- that is, she'd be the "employer". Is that correct?

2) Following on from the previous question (though it's not going to happen this year)- she could contribute up to the maximum if she wanted, i.e. up to $58,000 if she was earning that, or up to her total earnings, whichever is lower, because she's technically her own employer?

3) Contributions could be deducted against federal and state taxes. It looks like they could also be deducted against SECA taxes- is that right?

4) As a regular, non-ordained, W2 employee, my contributions go in per paycheck, though obviously the amount can be adjusted on different paycheck. For her, are there any limits as far as when the contributions have to go in? As someone who is self-employed, she's not receiving paystubs from herself. Could we wait until sometime in December when we have a fuller understanding of her total earnings for the year, and put in money as a lump sum?

I *think* that's all of our questions, but if anyone has any experience with doing this and has tips to add, we'd gladly listen.
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