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Boss issued check payable to me, Memo is sep retirement. I thought it would be put in an acct for me, amt exceeds my current IRA max annual contribution ...HELP
Should I just deposit the max in my IRA Then open another IRA acct? I don’t want to mess up when tax time comes...
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Retirement tax questions
A SEP contribution must be deposited to an IRA as a SEP contribution, not as a personal contribution. The deposit should be made to a separate SEP-IRA account established in your name so that the custodian will treat (and report to the IRS) the contribution as a SEP contribution by default. Since a SEP contribution is an employer contribution, the contribution is not reportable anywhere on your individual tax return. Your employer reports it on your employer's tax return.
Most employers deposit SEP contributions directly to your SEP-IRA account and, if you do not set up a SEP-IRA account, the employer will establish one in your name on your behalf. Your employer seems to be one that takes less responsibility for ensuring that the SEP contribution is deposited properly. By giving you the money to deposit, your employer runs the risk of you not depositing the money correctly, thereby not only potentially disqualifying the employers SEP plan but creating numerous problems with the accounting of your compensation and tax withholding. I'm not sure why an employer would take that risk, but some obviously do.
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