Contributed too much into my SEP

als12065 — Sun, 21 Mar 2021 15:36:00 GMT

I contributed too much money into my SEP according to TurboTax. I need to pull more cash then currently available, so if I transfer stock out of the account into an individual plan, do I go on cost or the current value? I am assuming cost, but not sure. Thank you.

Re: Contributed too much into my SEP

DianeW777 — Wed, 24 Mar 2021 16:49:38 GMT

Yes. You must withdraw your contributions from the plan itself. If you want to use a single Traditional IRA, to move the amount out of the SEP-IRA, it's an extra step, but make sure to remove all the excess plus earnings from your SEP-IRA.

So practically speaking this is cashing out some stock within the plan that will equal the amount you must withdraw that is an excess, including the earnings on that excess (from the time of contribution until removed). Once transferred to your Traditional IRA you can remove the cash.

As long as you pull out enough cash needed to be withdrawn, which will be current value since the stock must be sold to get the cash to withdraw, cost will not be a factor in this transaction.

Please update here if you have more questions.

[Edited: 03/24/2021 | 9:49a PST]

topic Re: Contributed too much into my SEP in Retirement tax questions

Contributed too much into my SEP

Re: Contributed too much into my SEP