I have a full-time job (W-2) and have paid the maximum social security tax for the year. I also have a LLC (taxed as partnership, pass through) and an associated SEP-IRA. TT Business, not having the full picture, assumes the 12.4% social security tax in self-employment (SE) tax calculation and ends up with a higher SE tax and (lower SEP IRA contribution limit) than what I think should be correct numbers.
When I port the Schedule K-1 from TT Business to TT Personal (Premier in my case), which has the broader picture, TT personal calculates a lower SE tax (and a higher SEP contribution limit) because it does not have any social security component in its SE tax calculation. It tells me I can contribute more to my SEP-IRA (than the TT Business limit).
Two questions:
(1) Can I override the SEP-IRA limit calculation logic in TT Business? Running my own calculation with social security tax rate set to 0 (I understand 7.65% FICA is still there etc.). I can generate the same limit calculated in TT Personal on paper this way, but don't see a way to ask TT Business to use those numbers. LLC paying more SEP-IRA contribution is preferable.
(2) If it is not possible to override TT Business, what is the correct way to make this extra contribution to SEP-IRA? It's an additional amount on top of what is shown in Schedule K-1. If paid out of LLC account it messes up the balance sheet and all LLC calculations. Can it (should it) be paid out of a personal account for example?
