SEP IRA and 401K contribution household wage criteria?

[SEPIRAUSER]

Is there any limit based on the household income to contribute to SEP IRA(Sole Prop.) , Spouse 401 K(18K), Different employer 401k (18K) during the same year?Scenario: Sole Prop Profit 80K, W2 Self income 60K, W2 spouse Income 90 K. Maximize deduction goal= (80/ 4)=20k+18K+18K

[SweetieJean]

<a rel="nofollow" target="_blank" href="https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-seps-contributions">https://www...>

[SweetieJean]

"Spouse 401 K(18K), Different employer 401k (18K) during the same year?"
The maximum is $18k per person, not per employer.

[SEPIRAUSER]

Yes. My question is can I put 18 K towards a W2 employer towards 401k Plan while my wife puts 18K towards her W2 employer 401K plan in addition to 25% of my Sole Prop Profit towards my SEP IRA. Assuming that my Sole Prop NetProfit is 80 K and 25 % of that is 20k. My W2 employer is different than my Sole Prop and is different than my Spouse W2 employer.

[Critter]

Yes, you can put into a 401K & a SEP IRA in the same tax year  ... read the rules in the link posted above.

[SweetieJean]

As indicated in the link above, the amount of the regular IRA contribution that you can DEDUCT on your income tax return may be reduced or eliminated due to your participation in the SEP plan.

[SEPIRAUSER]

Can you paste the section so that I can ready carefully. Sorry for asking again and I really thank you for your help. I just need to make sure that  there is no Income CAP.

[SweetieJean]

<a rel="nofollow" target="_blank" href="https://www.irs.gov/retirement-plans/plan-participant-employee/2016-ira-contribution-and-deduction-l...>

[SEPIRAUSER]

THanks that table is very informative. So for a Married File Jointly with AGI more than 118K there is no deduction for IRA. does the same assumtption hold true for SEP IRA? Your first answer contradticts with the comments by Critter#2 user. which one is correct?

[dmertz]

SweetieJean, your reference applies to regular personal IRA contributions, not the contributions being discussed here.

The $18k amounts are individual employee elective deferrals subject to section 402(g) limitation.  SEP IRA contribution are employer contributions limited under section 402(h).  These are independent limits.

[dmertz]

As Zbucklyo mentioned, for a self-employed individual, a special calculation must be done because, in determining the amount of which 25% is able to be contributed to a SEP IRA, net profit must effectively be reduced by the deductible portion of SE taxes and the amount of the SEP IRA contribution itself before multiplying by 25%.  This result is equal to reducing net profit by the deductible portion of SE taxes and then multiplying by 20%.

[SEPIRAUSER]

I hope Dmertz is right but need some confirmation. As this will help me put money in my SEP correctly. I will not put anything to my SEP if it's not going to impact on my deduction. Also what's the last date on putting funds to my SEP. I have already opened one account before Oct 1 deadline but have not put any money. Is there any website where I can pretend filing taxes and see it myself if it's allowing me or not do double sure.

[dmertz]

A SEP IRA contribution for 2016 can only be made after April 18, 2017 if by April 18, 2017 you submitted a request for filing extension.

[SEPIRAUSER]

I am referring to year 2017 .  so I can make my appropriate contribution by April, Right? Dmertz , are you a CPA by profession?

[Critter]

You will need to wait until you complete your return to fully fund the SEP so you should not try to maximize the contribution until then to avoid over contributing.