dgro
Level 1

SEP maximum contribution

My 2020 self employment gross/total income will be approx $44K

My 2020 total business expenses will be approx $10K

Giving a net income of approx $34K

 

Why does SE TurboTax tell me that I can deduct a maximum $6,346 SEP contribution?

 

IRS states:  Contribute as much as 25% of your net earnings from self-employment (not including contributions for yourself), up to $57,000 (for 2020 and $56,000 for 2019).

 

Which mean I should be able to contribute $34K * 0.25 = $8,500

Why the $2,154 difference in your calculation?