I am self employed and used turbotax to maximize my IRA contribution - calculated as ~40K. But the IRA contribution limit is $5500. How do I cover the remaining $34.5K?

[VolvoGirl · Accepted solution]

The sep IRA is not the same as the traditional IRA.  You do not deduct it in the same place.  Enter it here
https://ttlc.intuit.com/questions/3126046-where-do-i-enter-my-sep-ira-contributions

[Anonymous]

this is because you probably only have a traditional or Roth IRA account at Schwab. As others have pointed out you need to set up a SEP-IRA.  please read their comments

here's a link for SEP-IRA at Schwab.  

https://www.schwab.com/public/schwab/investing/accounts_products/accounts/small_business_retirement/...

[fanfare]

TurboTax will maximize an SEP IRA contribution.

Ask your custodian for the forms for an SEP IRA. I believe the deadline is Dec 31.

[fanfare]

Click maximize only when your return is complete in all other respects. Otherwise you may overcontribute, which causes trouble.

[jcallaway101turb]

does this mean that everything goes to the SEP IRA or is it 5.5K to the traditional and 34.5 to the SEP (or does this matter)?  

Also, if I have a SEP acct set up from 2017, can I just use that same acct for 2018?

[dmertz]

SEP-IRA contributions are separate from regular personal traditional IRA contributions.  If you are making both, they should be made to separate accounts to avoid the custodian confusing SEP contributions with regular personal contributions; your particular custodian might ever require separate accounts.  By default, contributions to a SEP-IRA are classified as SEP contributions and contributions to a regular personal IRA (not a SEP or SIMPLE IRA) are classified as regular IRA contributions.

Yes you can use the same SEP-IRA for all of your SEP contributions.

If not already established, the deadline for establishing and contributing to a SEP plan is the due date of your tax return.

[jcallaway101turb]

I'm still wondering about the difference -- when I ask turbo tax to maximize as an individual IRA it indicates that I can deposit about $40K in to an individual IRA, when I change it to maximize for a SEP IRA it only allows for about $16K to the SEP.   Of course, I'd like to use the individual -- but when I try to get Schwab to transfer to an individual they tell me that the max is $5.5K?  

[dmertz]

You confusing an individual 401(k) with an IRA.  An individual 401(k) is not an IRA, it's a different kind of qualified retirement account.  You are also confusing a 401(k) and SEP-IRA with a regular personal IRA which is what Schwab is indicating has a $5,500 contribution limit for 2018.

The deadline for establishing an individual 401(k) to receive contributions for 2018 is December 31, 2018.  It's likely too late to get an individual 401(k) established by this deadline.