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New Member

I'm an S Corp owner wanting to report a SEP IRA contribution. The "Self-Employed Retirement Plans" page's continue btn only returns me to summary. What am I missing?

 
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Level 15

I'm an S Corp owner wanting to report a SEP IRA contribution. The "Self-Employed Retirement Plans" page's continue btn only returns me to summary. What am I missing?

Except for the purpose of a self-employed health insurance deduction, you are not self-employed, you are an employee of your S-corp.  Unless you have a SARSEP plan established before 1997, SEP contributions are employer contributions only.  The contribution to your SEP IRA must be made by the S corp and is deductible on the S corp's tax return, not your individual tax return.  The maximum your S corp can contribute to your SEP IRA is 25% of your W-2 compensation.

Since you are not self-employed, you do not need to be using TurboTax Self Employed.  TurboTax Premier is sufficient.

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Level 15

I'm an S Corp owner wanting to report a SEP IRA contribution. The "Self-Employed Retirement Plans" page's continue btn only returns me to summary. What am I missing?

Except for the purpose of a self-employed health insurance deduction, you are not self-employed, you are an employee of your S-corp.  Unless you have a SARSEP plan established before 1997, SEP contributions are employer contributions only.  The contribution to your SEP IRA must be made by the S corp and is deductible on the S corp's tax return, not your individual tax return.  The maximum your S corp can contribute to your SEP IRA is 25% of your W-2 compensation.

Since you are not self-employed, you do not need to be using TurboTax Self Employed.  TurboTax Premier is sufficient.

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New Member

I'm an S Corp owner wanting to report a SEP IRA contribution. The "Self-Employed Retirement Plans" page's continue btn only returns me to summary. What am I missing?

Thanks, dmertz! That's the answer I was looking for. I get it now that I needed to claim the contribution on my company's corporate return 1120S instead of my individual 1040. Perhaps Turbo Tax could add the info in there in for folks who have added a K-1, but no Schedule C. Perhaps it's too much of a niche case. Also thanks for the tip about Self Employed vs Premier!
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Level 15

I'm an S Corp owner wanting to report a SEP IRA contribution. The "Self-Employed Retirement Plans" page's continue btn only returns me to summary. What am I missing?

It's probably beyond the scope of tax return preparation software to provide instruction on the operating procedures of an S corp.
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Level 1

I'm an S Corp owner wanting to report a SEP IRA contribution. The "Self-Employed Retirement Plans" page's continue btn only returns me to summary. What am I missing?

When you say 25% of W-2 compensation, should it be box 1 (Fed wages) or box 5 (Medicare wages) My box 1 is higher because the corp. paid health insurance for the officer and therefore those payments were added to box 1 (with box 14 detailing the health ins payments). Are those payments qualify for purpose of calculating max SEP as part of compensation ?

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Expert Alumni

I'm an S Corp owner wanting to report a SEP IRA contribution. The "Self-Employed Retirement Plans" page's continue btn only returns me to summary. What am I missing?

The IRS says: "SEP plans (that are not SARSEPs) only allow employer contributions. For a self-employed individual, contributions are limited to 25% of your net earnings from self-employment." 

 

Net income is your take-home pay after taxes and other payroll deductions.

Wage earners can estimate net annual income by subtracting federal, state and local taxes paid year-to-date from the gross income earned year-to-date. This number is net income year-to-date. 

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New Member

I'm an S Corp owner wanting to report a SEP IRA contribution. The "Self-Employed Retirement Plans" page's continue btn only returns me to summary. What am I missing?

Anastasia,

 

You can use box 1 for purposes of calculating a SEP contribution (even if it includes >2% shareholder health insurance premiums.  Check out page 4 of Pub 560 under the definition of "compensation" - column 2  https://www.irs.gov/pub/irs-pdf/p560.pdf

Every little bit helps!

Jeff

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Level 1

I'm an S Corp owner wanting to report a SEP IRA contribution. The "Self-Employed Retirement Plans" page's continue btn only returns me to summary. What am I missing?

Thank you Jeff ! very helpful !