topic Turbo Tax is suggesting the amount that I should contribute to my SEP. As I get closer to retirement, I would like to increase my contributions above that. Is it allowed? in Retirement tax questions

Turbo Tax is suggesting the amount that I should contribute to my SEP. As I get closer to retirement, I would like to increase my contributions above that. Is it allowed?

vicente — Sat, 01 Jun 2019 20:12:51 GMT

If you are a sole proprietor, the maximum amount you can...

Zbucklyo — Sat, 01 Jun 2019 20:12:52 GMT

If you are a sole proprietor, the maximum amount you can contribute to a SEP is approximately 18.59% of your income from self-employment (20% minus a deduction based on one-half self-employment tax). If you hit the maximize button in Turbotax, it will calculate your maximum allowed amount.

If you have no other contributions based on wage employment (like a employer 401 (k) plan), you can increase your contribution starting in tax year 2019 by starting a solo 401 (k) plan, which has a larger contribution limit. It is too late to do that for 2018, however.

You can only contribute to your SEP up to 25% of your net...

CarolynM — Sat, 01 Jun 2019 20:12:54 GMT

You can only contribute to your SEP up to 25% of your net business income or $55,000, which ever is less.

The 2019 cap is $56,000.

For more information, follow this link:

https://blog.turbotax.intuit.com/self-employed/end-of-year-retirement-tips-for-employees-and-the-sel...

Here is the IRS link confirming the contribution amounts:

https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-seps-contributions

[Edit 3/25/2019 11:15 AM PST]