SEP IRA

Posts Tagged ‘sep ira employer contribution deadline’

Question: Can I open a SEP IRA if my wife has a 401k at work?

My wife makes over $125k per year and receives a w-2 from her employer. She contributes to a 401k through her employer. I am a self employed consultant, sole proprieter with NO employees and receive 1099’s from my clients. I earn about $80k/year. I know any standard IRA Contribution by either of us is not tax deductible since she is in the 401k but if I open a SEP IRA are my contributions, tax deductible? Also, can I still open a SEP IRA before the filing deadline of April 15?

Answer: Yes, You can
the max you could contribute to your SEP IRA is 49,000.00
Your wife could max out her 401k at 16500.00

Question: SEP – IRA Question (plus traditional IRAquestion)?

Currently I have a Traditional IRA plus I have a SEP-IRA which was started by my employer for me. Currently my employer pops in $200/month into the SEP. I know I can contribute additional funds to the SEP, but are those contributions to the SEP tax deductible like the traditional IRA?

Follow Up Question 1: Assuming I start a small side business and continue working for my employer can I start a second SEP-IRA? How much would I be allowed to contribute to both and would either be tax deductible?

Final question: Assuming I leave my current employer and contribute to the SEP I received from the current job, can I keep the SEP and make contributions (and if so how much and are they tax deductible).

I know that that was a lot to digest, thank you in advance for your help.

~Crighton

Answer: First, funds contributed to a SEP are tax deductable. Second, maximum Contribution 1/4 of your earnings up to $45,000. If you are self employeed you can establish your own SEP for the self employeed income.

I am not aware that you are allowed to contribute to a SEP set up for you by your employer. The IRS does not seem to address that subject very well, but I am almost sure that you can not. You can however set up an IRA account and contribute to it. That is allowable. There may however be limits to the amount you can deduct based on your agiif more than $83,000 if married filing jointly.

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