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Level 2
January 22, 2026
Question

SEHI Impact on SEP IRA calculation

  • January 22, 2026
  • 1 reply
  • 0 views

Self Employed - No Employees

Do I need to deduct my SEHI premiums from my Schedule C income to calculate the base for my 20% SEP IRA contribution amount?

    1 reply

    Level 15
    January 22, 2026

    Both SEP contributions and SEHI reduce AGI but not Schedule C income. 

    AmakiaAuthor
    Level 2
    January 22, 2026

    Thank you!  TurboTax has always taken my Schedule C income and subtracted 1/2 of my self employment tax to get the base for calculating my max SEP IRA contribution @ 20%.  I recently saw on ChatGPT that you also need to subtract your deductible SEHI premiums from the Schedule C income to get the SEP IRA base.  That didn’t seem right to me and it’s not the way TurboTax does it.