Apologies in advance this is so long. For my SEP IRA (self-employed, no employees) contribution for tax year 2019, I miscalculated my maximum contribution and transferred almost $200 more than the maximum amount into my SEP IRA account in July 2020 (before the revised 2019 tax filing due date). I caught the error before submitting my 2019 tax return, so my tax return contains the correct maximum contribution amount.
I understand that a process exists to correct excess SEP IRA contributions, but I don't know if what I did actually is an excess contribution. My brokerage firm does not capture information about the tax year for which a SEP IRA contribution is intended (like it does for Roth IRAs), and the allowable period for making SEP IRA contributions for consecutive tax years overlaps, so it seems like I might be able to simply reduce the amount I add to my SEP IRA before the 2020 tax filing deadline, so I don't cumulatively contribute more than the maximum based on 2019 and 2020 SE net income, and avoid all the complicated excess/over contribution corrective actions. In other words, if the amount I added to my SEP IRA account during CY 2020 was $18,200, and the maximum contribution for 2019 and 2020 were $18,000 and $17,000 respectively, could I just fund the account with $16,800 before the tax year 2020 deadline (now May 2021) to get to a total of $35K (combined maximum)? And since I reported $18K on my tax return as my contribution for 2019, should I report a $17K (v $16.8K) as the SEP IRA contribution on my 2020 taxes? Thanks for any feedback!
