dmertz
Level 15

Retirement tax questions

Receiving a W-2 indicates that your spouse was an employee, not self-employed.  If your spouse was not an employee, the issuer needs to correct the W-2 to indicate that no wages were earned and must issue a Form 1099-MISC to report the non-employee compensation.

As is stands, your spouse's SEP-IRA contribution can be based only on her net profit from the side business.

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