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Retirement tax questions
You forgot to take into account one half of SE tax.
Contribution limits for self-employed individuals
You must make a special computation to figure the maximum amount of elective deferrals and non-elective contributions you can make for yourself. When figuring the contribution, compensation is your “earned income,” which is defined as net earnings from self-employment after deducting both:
- one-half of your self-employment tax, and
- contributions for yourself.
February 6, 2021
10:13 AM