Employer SEP contributions and Traditional IRA deduction on form 1040.

manigill-tax — Wed, 05 Jun 2019 06:14:51 GMT

I am the sole Shareholder and employee of S corp. The S corp contributed 25% of my wages towards SEP IRA. Can I contribute towards my Traditional IRA and claim deduction ($5500) on form 1040? if yes, will it be assumed that I am covered by employer plan and l be subject to limitations for claiming deduction on my traditional IRA contribution?

Yes and no. You can contribute to a Traditional IRA, but...

AmandaR1 — Wed, 05 Jun 2019 06:14:53 GMT

Yes and no. You can contribute to a Traditional IRA, but it doesn't sound like you would qualify for the deduction (if your income is above the employer plan limits).

Your SEP plan means that you are covered by an "employer plan" for your $5,500 individual contribution. See this at the IRS here: https://www.irs.gov/retirement-plans/are-you-covered-by-an-employers-retirement-plan

Therefore, if your Adjusted Gross Income (AGI - a subtotal on your tax return), is above certain limits, you can't take a 1040 deduction. The income limits are posted here at the IRS: https://www.irs.gov/retirement-plans/2017-ira-deduction-limits-effect-of-modified-agi-on-deduction-i...

While not directly related to your situation, this answer explains the S-corp/SEP/employee relationship well: https://ttlc.intuit.com/replies/6413927

topic Employer SEP contributions and Traditional IRA deduction on form 1040. in Retirement tax questions

Employer SEP contributions and Traditional IRA deduction on form 1040.

Yes and no. You can contribute to a Traditional IRA, but...