I'm 61 self emp. sched C line 31 $ 15,000 pay $2200 self emp tax How much can i contribute to IRA & sep IRa. ? wife 63 no income, how much can she cont. to her ira ?

[20jojo21]

I am payed on 1099
What can i contribute to my IRA ?
                                                    SEP IRA (No employees)
What can wife (no income) cont. to her IRA ?

[tagteam]

@dmertz 

[dmertz · Accepted solution]

$2,200 is not the correct amount of SE tax for $15,000, so your numbers are inconsistent.  Either your net profit is more than $15,000 or your SE tax is less than $2,200.  Without an accurate number for your net profit, it's not possible to accurately calculate the maximum SEP contribution. or the total amount that you and your wife are eligible to contribute to regular IRAs.

If your net profit actually was $15,000, your SE tax would be $2,120 your net earnings would be ($15,000 - $2,120 / 2) = $13,940.  Your maximum SEP contribution would be 20% of $13,940  = $2,788.  The amount of compensation remaining to support regular traditional or Roth IRA contributions would be $13,940 - $2,788 = $11,152.  If you contribute the maximum $7,000 to your regular IRA, that would leave $4,152 that your wife could contribute to an IRA.

Of course the numbers will be a bit different based on your actual net profit.

[20jojo21]

Thank you for taking the time to respond. Your answer confirms what I have researched. My numbers were not exact, but more of a ballpark. I have another question concerning depreciation on my car that I reported 2021. 

How it will effect 2022 return. Can I ask you directly or should I do it through the community. ?

 It is very difficult to do in the community as I can only give so much information. And accounting is a 

foreign language to me. Thanks again for you help. Let me know....... Thanks

[dmertz]

You should ask about depreciation separately rather than ask about it in the retirement section of this forum.