Hi Tayloredurogyn,
This is a great question!
In gneral you can put in up to 25 percent of your net earnings from self-employment, which is your net Schedule C profit minus the deduction for one-half of your self-employment tax. The maximum annual contribution, $66,000 for 2023 (up from $61,000 in 2022) For those 50 or older, there is also a $7,500 catch-up contribution amount allowing total contributions in 2023 of $73,500.
In addition to a Roth or Traditional IRA you coud consider contributing to many other retirement plans, such as a Simple, SEP IRA, or Solo 401K.
In 2023, the contribution limits are as follows:
- Traditional or Roth IRA are limited to $6,500 (if over 50, $7,500).
- SIMPLE IRA accounts, are limited to $15,500, (50 or over $19,000.
- SEP IRA accounts, contributom is limited up to an additional 25% of your net earnings from self-employment for total contributions of $66,000 for 2023.
- Solo 401K accounts, contribution limit is up to an additional 25% of your net earnings from self-employment for total contributions of $66,000 for 2023,($7,500 catch-up contribution amount allowing total contributions in 2023 of $73,500.)
For additional tips on how to boost you retiurement savings, click on this link:
Boost Your Retirement Savings
For additional information on Solo 401K plans you may click on this link:
Solo 401K for the Self Employed
Hopefully you will find this information helpful!
Terri H.
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Terri Lynn H.
