The majority of my income is reported through W-2s. About one quarter is reported on 1099 from another business. My W-2s show participation in employer retirement plan and thus when I show contributions to our IRA's, I am being told the income exceeds the allowable amount for IRA deduction. Can I take the IRA deduction under self employed status using the $6500 contribution and $6000 catch up?
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You can establish a SEP plan for you self-employment business and make a SEP-IRA contribution up to the maximum permissible amount based on you net earnings from self-employment. You have until the due date of your tax return to do so. SEP contributions are employer contributions only (as self-employed, you are your own employer), not an elective deferral, so no catch-up contribution is permitted. Your maximum permissible SEP contribution is the lesser of $53,000 or:
20% * (net profit from self-employment - the deductible portion of self-employment taxes)
It's too late to establish any other kind of self-employed retirement plan for 2016.
No, in your case you can't make a deductible IRA contribution for your self-employment income, however, you may be able to set up a different type of retirement plan and make a deductible contribution for your self-employment income. You may find it beneficial to discuss this with a stock broker or securities company, who can set this up for you.
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