SEP IRA

Posts Tagged ‘sep ira limits 2010’

Question: can I take tax benefits for both a SEP IRA and traditional ira ? are there limits?

Answer: You need to download publication 590 on the IRS website. It is easy to read with a lot of examples. http://www.irs.gov

The Ballad of Ira Hayes – Kris Kristofferson

Question: Calculating SEP-IRA Contribution limit?

I’m a tad confused as to how to calculate my 2010 SEP-IRA Contribution limit from all self-employed income sources. From what I’m reading on IRS website and from other sources SEP-IRA contributions are limited to 20% of NET income from self-employment (for simplification-sake.)

My problem is that half-of the time I was working as a self-employed through a business (Schedule-C) and some via an agency, still self-employed though as an independent contractor not as an employee. I will have some business deductions on Schedule-C. Do I add up all my income and then take my business deductions to come up with the NET amount on which I’m to base my SEP-IRA Contribution limit? Or…?

Answer: You are more than a tad confused. If you had any taxes withheld from the pay from an agency, then you were an employee. That means your SEP-IRA Contribution can’t include that income. Also, any expenses that were related to the money earned as an employee don’t go on your Schedule C. They belong on Form 2106 which feeds to your Schedule A. The expenses are part of a class that are only deductible to the extent that all such expenses exceed 2% of your Adjusted Gross Income.

I hope this helps.
Gary

Iraklis poreia sto kentro tis athinas 09/06/2010 vouli ira-10