SEP IRA

Archive for May, 2007

Question: SEP IRA vs. Individual 401K?

My husband is self-employed. Currently he contributes to his SEP IRA but I read an article that said self-employed persons with no employees could contribute more to an Individual 401k. Our broker said, Ask the accountant and the accountant said Get the details from the broker. So, what’s the answer?

Answer: While both retirement accounts have a limit of $49,000 per year, you may be able to contribute more to an Individual 401k, at the same income level. The reason: you can contribute up to 100% of the first $16,500 of net self-employment income to the 401k, plus a profit sharing Contribution of up to 20% for self-employed (SE) individuals.

The SEP-IRA has a Contribution limit of 20% of net self-employment (SE) income, after deducting 1/2 of your SE tax. So, if your husband has net income of $100,000, he could contribute $18,587 to his SEP-IRA, and substantially more, near double that, to his 401k.

The SEP, however, is easier to set up and administer. The 401k allows for loans from the plan (a disadvantage, in my opinion).

Hope that helps.

DISCLAIMER: While the information in this response was obtained from sources believed to be reliable, its accuracy and completeness cannot be guaranteed. The opinion voiced in this answer is for general information only and is not intended to provide specific advice or recommendations for any individual. Questioners are urged to consult with their professional advisers before making any decisions regarding their finances.

Financial Services Chino CA: Investments, Mutual Funds, 401k, IRA, Annuity, Life Insurance

Question: IRS Tax Deffered Question,I’am a student refiling for grant.?

What do these lines want?

(1)Indicate in item 16 the ammount of 2006 income which represents payments to pension,retirement or savings plans.Include any IRA deductions and payments to self-employed SEP,simple,and other qualified plans.Also include payment to tax-deferred pension and savings plans.

(2) Student and Spouses. Tax deferred payments.

Answer: Did you have a job in 2006 that had a retirement plan? Did you contribute to your employer’s retirement plan, or your own IRA? My guess is, you didn’t. So if you didn’t contribute to a retirement plan, then (1) is zero.

Are you married? If not, (2) is zero. Not sure about (2) other than that, provide more info if you can.

Are you looking to Self-Direct Your Retirement

Webster Tarpley WW3 Scenario if Iran is attacked …