SEP IRA

Posts Tagged ‘simple ira sep ira’

Question: My employer gives me both a W2 and a 1099. Legal?

I work for a small firm. Every year they give me a W2 as well as a 1099. The 1099 is only for $4800, which is a lot less than the W2. Nevertheless, is this legal for the firm? If so, can I take advantage of the 1099 I am receiving and call myself self employed to deduct legitimate home office expenses? Could I also set up an SEP plan? I already have a SIMPLE IRA at work.
The 1099 I receive in addition to my W-2 is a 1099-MISC and it is labelled as independent Contractor. Basically my company pays me $400 a month this way, to supplement my W-2 earnings. So it is legitimate payment from them to me, and I do pay taxes on it. But my question has more to do with the second part. Since I am receiving the 1099, can I use it to my advantage and deduct home office expenses or setup an SEP retirement plan?

Answer: What type of 1099 is it? If it is a 1099-MISC, miscellaneous income, no, he is not corect to do that, if he’s also giving you a W-2. If it is a 1099-DIV (dividend) or 1099-INT (interest), that may be correct, if you own stock and received dividends, or they paid you interest for some reason. To correctly answer, we need to know what type of 1099 it is, and more details regarding what this income represents. Also, is this income double-counted, i.e., did you actually receive what is on the W-2 plus what is on the 1099?

But short answer, if its a 1099-MISC and you are also getting a W-2 from the same company, that is not correct, you cannot be both an independant contractor and an employee of the same company.

Forex Managed Accounts – A Better Way to Trade

Question: I have a SIMPLE IRA Account that I want to transfer to another broker. What kind of IRA account do I need?

I worked for CPA and I have a SIMPLE IRA. We had 3 employees. My money was invested through First Allied where trades cost $50 and there was a $30 yearly fee.

Now I am unemployed and I want to move my account without any tax implications. I am trying to open a IRA with www.optionshouse.com. I can either open a Traditional IRA or a SEP IRA. Which do I choose? I don’t ever really plan on working for myself.

Can I convert it to a Roth IRA? How do I do this myself?

Answer: you would open either an IRA rollover or a traditional IRA. You would only open a SEP IRA if you were self employed.

You can convert to a Roth IRA at a later date if you like. You would have to contact the company where the IRA is held and ask for the appropriate forms. Remember, the year you convert from an IRA to a Roth, the amount you convert is taxable as income for the year.

Ira-Rose’s Balloon Dance – Happy 2nd Birthday, Baby!