Cannot enter SEP Contribution

3 replies
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When I enter "Yes" to Self-Employment Plans, I receive a message that Self Employment Plan are for Self-employment income or K1's. I did not enter Self-Employment Income, but I did enter a K-1. How do I add the SEP Contribution Deduction with only K-1 Income?

BillM223Answer

Level 15

TurboTax employee Isabella has previously addressed this issue.

"The income must be earned income to qualify for the child and dependent care credit. If this income is on a K-1:

If the K-1 is from a partnership (Form 1065), it will count as earned income if there is an entry in box 14 with code A net earnings from self-employment.

If this K-1 is from an S corporation (Form 1120S), then the corporation must have issued a W-2 as an employee for you to have earned income."

So, is the income listed one of these ways?

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BillM223Answer

Level 15

TurboTax employee Isabella has previously addressed this issue.

"The income must be earned income to qualify for the child and dependent care credit. If this income is on a K-1:

If the K-1 is from a partnership (Form 1065), it will count as earned income if there is an entry in box 14 with code A net earnings from self-employment.

If this K-1 is from an S corporation (Form 1120S), then the corporation must have issued a W-2 as an employee for you to have earned income."

So, is the income listed one of these ways?

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

steve1stsecAuthor

Level 2

Thanks for your response. Yes, the K-1 is from an s-corp (1120-s). It's a single-member llc with an s-corp election. The single member also is on a w-2 payroll in which self employment taxes are paid by the employer and employee. I was not able to go through the easy-guide, but went directly to the form and entered contribution and it appears to work fine. Thanks Again.

dmertz

Level 15

Except for a self-employed health insurance deduction, you are not self-employed. You are an employee of the S corp and the deduction for the retirement contributions goes on the S corp's tax return, not on your personal tax return. The maximum SEP contribution is 25% of your S corp compensation reflected on your W-2 from the S corp.