My spouse was a contractor, received a W2, did not have retirement plan, has a side business, but earns very little, contributed to SEP IRA, how can we deduct in TTAX?

[anindop]

My spouse was a contractor, although she received a W2, her employer did not sponsor any retirement plan. She also has a side business, but that earns very little. She has contributed to SEP IRA, how do we deduct that in turbo tax?

[dmertz · Accepted solution]

Receiving a W-2 indicates that your spouse was an employee, not self-employed.  If your spouse was not an employee, the issuer needs to correct the W-2 to indicate that no wages were earned and must issue a Form 1099-MISC to report the non-employee compensation.

As is stands, your spouse's SEP-IRA contribution can be based only on her net profit from the side business.