My husband is an S Corp Owner and has contributed to his SEP IRA. A CPA that we typically trust said that the max he can contribute to the SEP is 25% of the W-2 compensation that he gives himself from the business, PLUS 25% of the business income (box 1 of K-1). I can't seem to find anything that confirms that. If that's not possible, it seems his retirement contribution will have to be much lower than we'd both like.
I'm also wondering if the full SEP contribution has to be applied to the S Corp tax return, or if it can be deducted from our personal return. I can't seem to make that work with TurboTax, so maybe it's not possible. I believe we would have a greater benefit if it was deducted form the personal return.
Any insight?
