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New Member
posted May 8, 2021 4:19:02 PM

How do I calculate the amount that I can contribute to my sep ira

Is it based on my projected Adjusted gross income for 2020?

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1 Replies
Expert Alumni
May 9, 2021 5:11:32 PM

No, it is not determined by your Adjusted Gross Income (AGI).  It is determined by your earnings from self-employment.

 

The maximum contribution limit for 2020 is $57,000 ($56,000 for 2019), or 25% of your employees' eligible compensation.  For your own contribution, the limit is 20% of your net earnings from self-employment, as determined under the SEP IRA rules*, whichever is less.   

 

*The maximum compensation that can be taken into account for purposes of this calculation is $285,000 per participant in 2020