DawnC
Expert Alumni

Get your taxes done using TurboTax

 

No, only the portions you contribute for your employees are an adjustment to the Self-Employment tax.  Your portion only reduces income tax. 

  • For a self-employed person contributing to his or her own SEP-IRA, contributions are deducted as an adjustment to income on Form 1040 line 28. SEP contributions reduce a person's adjusted gross income, reduce taxable income, and thereby reduce the federal income tax. SEP IRAs do not impact the calculation of the self-employment tax since the self-employment tax is calculated before SEP contributions are calculated. A self-employed person reduces income tax only by contributing to his or her own SEP-IRA.
  • A self-employed person who contributes to SEP IRAs for his or her employees boosts business expenses.  This lowers net profit, reducing both the self-employment tax and the income tax.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"