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rachh432
New Member

Do I report my simple IRA contributions under Traditional and Roth IRA Contributions?

 
2 Replies
DawnC
Expert Alumni

Do I report my simple IRA contributions under Traditional and Roth IRA Contributions?

No.  You only need to enter SEP/SIMPLE IRA contributions made through self-employment work.  If your employer made a SEP/SIMPLE IRA contribution for you, then you don’t need to enter it in your return. (While you could contribute more to an employer-sponsored SEP/SIMPLE IRA, TurboTax doesn’t support these contributions.)

 

Before you enter your SEP/SIMPLE IRA contributions, first make sure you've entered self-employed income. This allows us to calculate the maximum amount you're allowed to contribute to your SEP IRA.

 

You must calculate your own SIMPLE contributions. TurboTax cannot figure your maximum contribution or employer match for you. Your contribution for your own SIMPLE must not exceed your net self-employment income.

Generally, all employees (including self-employed individuals) who receive at least $5,000 in compensation from the employer during any 2 preceding years (whether or not consecutive) and who are reasonably expected to receive at least $5,000 in compensation during the calendar year, are eligible to participate in the SIMPLE plan for the calendar year. But, you can establish a SIMPLE plan even if none of your employees participate.

The eligible employees can decide how much of their salary they want to contribute to the SIMPLE plan. Instead of paying the employee, you send this amount to the employee's SIMPLE account. As a self-employed person, you make your own SIMPLE IRA contributions.

The maximum amount which can be contributed to a SIMPLE in 2020 is $13,500 ($16,500 if age 50 or older).

As an employer, you must make either employer matching contributions or employer nonelective contributions.

Matching contributions must equal up to 3 percent of the salaries of employees who make contributions. You can reduce this amount only if:

1. The limit is not reduced below 1 percent;
2. The limit is not reduced more than 2 years out of the 5-year period that ends with (and includes) the year for which the election is effective; and
3. Employees are notified of the reduced limit within a reasonable period of time before the 60-day election period during which employees can enter into salary reduction arrangements.

Alternatively, you can make nonelective contributions equal to 2 percent of every eligible employee's compensation for the entire year, up to $285,000 of compensation per employee.

An employer may substitute the 2 percent nonelective contribution for the matching contribution for a year, only if:

1. Eligible employees are notified that a 2 percent nonelective contribution will be made instead of a matching contribution; and
2. This notice is provided within a reasonable period of time before the 60-day election period during which employees can enter into salary reduction arrangements.

 

SIMPLE IRA Plan FAQs

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dmertz
Level 15

Do I report my simple IRA contributions under Traditional and Roth IRA Contributions?

If you are not self-employed and your SIMPLE IRA contributions are made through a W-2 employer, enter amounts shown in box 12 of your W-2 only in box 12 of TurboTax's W-2 form, nowhere else in TurboTax.

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