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Retirement tax questions
The wording "employee contributions" may be confusing in this case. However, employees may be allowed to make their own contributions into their SEP, effectively using the SEP as they would a Traditional IRA. I've confirmed this with multiple sources, including this morning in conversation with a retirement specialists at Schwab. Here's the precise wording from Vanguard:
Employee contribution limits
- Employees may be able to make traditional IRA contributions to the SEP-IRA of up to $5,500 for the 2018 tax year (or $6,500 if age 50 or older) and up to $6,000 ($7,000 for employees age 50 or older) for the 2019 tax year.
- This amount is the total contribution allowed by the IRS that employees can make to all their IRAs (SEP, traditional, or Roth) each year.
(https://investor.vanguard.com/small-business-retirement-plans/sep-ira)
‎February 5, 2020
11:49 AM