Conflicting info regarding SEP IRA? One part tells me I've put in too much and now owe a penalty and then it says I should put more money into it. Limits are much higher.

[JonathanFL]

Seems like the software is looking at my SEP like it's a traditional IRA and not letting me deduct it to the fullest. But obviously I'm doing something wrong, given that it's telling me I've put too much in (I know the limit is higher than $5,530) and telling me I can put more in to maximize.

[CarolC]

It sounds like your SEP contribution may have been entered in the Traditional IRA section of the software.  If that's the case then remove/delete those entries in the Retirement and Investments section.

Follow these steps to enter your SEP contribution in TurboTax:

1. While in your return, click the Search Topics icon at the top of your screen
2. Type SEP accounts 
3. Select the SEP accounts option in the search results, click OK.
4. This will take you to the Self-Employed Retirement Plans screen, proceed through the screens to enter your info

[holmanski]

I had the same problem last year. TT calculated my max contribution at 5,753 even though my AGI was about 80K. How is that?

Greg

[dmertz]

AGI has nothing to do with determining your maximum SEP IRA contribution.  Your maximum SEP IRA contribution for a particular year contribution is 20% of your net earnings from self-employment for that year.  Net earnings are your net profit from self-employment minus the deductible portion of self-employment taxes.

If you did not max out the Social Security wage base that year, a maximum SEP IRA contribution of $5,753 implies that your net profit from self-employment was about $30,950.

[RMS5]

I'm having the same problem and TT says that SEP iras are "traditional" iras.

[fanfare]

@RMS5 

you must enter SEP contribution on the SEP panel.

Not as a regular Traditional IRA contribution.

see above.