SEP IRA Contributions are not deducted from Tax bill in TurboTax?

[dmertz · Accepted solution]

Are you self-employed?  If so, your maximum SEP contribution is determined from your net profit from self-employment.  No net profit, no permissible SEP contribution.

If the SEP contribution was made by an employer from which you receive a W-2, the employer, not you, gets the deduction.

[katherine-sweetman]

Yes net profit. Yes self employed. The contribution not being subtracted from tax bill. 

[dmertz]

A SEP contribution is an above-the-line deduction on Schedule 1 that reduces AGI.  It does not subtract  directly from your tax liability.

Examine TurboTax's Keogh, SEP and SIMPLE Contribution Worksheet to see the calculation of your self-employed retirement deduction.