According to the IRS, “an employee may participate in a SIMPLE IRA plan even if he or she also participates in a plan of a different employer for the same year. However, the employee’s salary reduction contributions are subject to the limitations of section 402(g), which provides an aggregate limit on the exclusion for elective deferrals for any individual.” The limit for 2008 is $15,500, plus a $5,000 catch-up of she is over 50. If she is maxing this out on the 401(k), then if your SIMPLE plan provides for a 2 percent nonelective contribution (i.e. not a matching contribution), she may be eligible for that. It would be best to consult your tax adviser first.

Yes, technically your wife could contribute to both plans. However, her total contributions are subject to the aggregate deduction limits. In plain English, that means that she is limited to a total dollar amount annually that she can contribute no matter how many plans she is eligible to participate in. For 2008 she can contribute a total of $15,500. If she is over 50 she can contribute an additional $5,000 as a catch-up. In your case your wife is contributing the maximum to her 401(k). This, of course, means that she cannot contribute to the SIMPLE IRA that you have established through your business. Typically SIMPLE IRAs are established allowing the employer to exclude part-time employees from the plan. Depending on how you established your plan, and the extent to which your wife’s employer matches her contributions to her 401(k) plan, you may be able to make contributions into your SIMPLE IRA plan as the employer. Since there are several variables in your situation it would be prudent to discuss the details of your plan and your wife’s 401(k) with your tax adviser.

The answer to your question depends on the amount that your wife is contributing to her 401(k). You said that she is maxing out her contribution to the 401(k) plan but if her maximum that she can put in is less than $10,500 than she may be able to make a SIMPLE contribution as well for 2008. Example, if she makes $60,000 and her contribution limit to the 401(k) is 15 percent, then she would be contributing $9,000. This would mean that at the other employer that had the SIMPLE plan, she could contribute up to $1,500 for her $10,500 maximum. The employer with the SIMPLE plan would also be able to do a match up to the 3 percent of her salary. If she made 100,000 at the company with the 401(k) and contributed 15 percent or $15,000, than she would not be able to contribute to the SIMPLE. Contribution rules are very complicated and it would be advisable for her to sit with a retirement consultant to make sure she gets the maximum contribution that she can.

Nah. It’s my understanding that you can’t exceed the annual limits from all available sources. Hence, if she has maxed out her 401(k) at her job, that’s it.