SEP Contribution Calculation Issue

[ThomasM125]

When you are logged into your TurboTax program you can click on the Live Tax Advice menu option to talk to a tax expert. Here is a link you can use to find help if you are using the desktop TurboTax program:   Turbo Tax Live Help

As far as your issue is concerned, the recommended steps to resolve it would be to look at your form 1040 before and after you enter your SEP contribution and see what numbers change. Then, investigate each area where there was a change to narrow down what is going on. 

One possibility is that you are not eligible for a SEP contribution so when you enter it it is not being deducted but you are subject to a penalty for an excess contribution to a retirement plan. Your SEP contribution would be limited to 25% of your wages from the business associated with the plan. There are also limits on how much you can contribute in total to retirement plans in a given year. 

I suggest you look at line 16 of schedule 1 to see if your SEP contribution is showing up on your tax return. Also look on line 8 of schedule 2 to see if there is an additional tax on IRA's or other tax-favored accounts.

To view your form 1040 and schedule 1 to 3:

1. Choose Tax Tools from your left menu bar in TurboTax Online
2. Choose Tools
3. Choose View Tax Summary
4. See the Preview my 1040 option in the left menu bar and click on it
5. Choose the Back option in the left menu bar when you are done 

[jammer2000]

I am using the desktop version, so the chat button is not available.  I did what you suggested, I entered $5,000 to traditional SEP and my taxable income went down but my tax due went up.

Something is wrong with the calculation regarding SEP.  My max SEP is roughly $50,000 so I am not exceeding those limits.

Getting extremely frustrated and should be refunded so I can use another tax service/software.

Don't they have a support line?  Its ridiculous.

[MonikaK1]

To reach TurboTax support by telephone, Desktop users can visit this webpage for the number.

[Onefish]

I get the impression that TT's strategy is to force users to pay for a solution to this question. The stock answer about entering "SEP IRA" in the search box and then "Jump to SEP IRA" no longer works. The calculation itself is simple enough; unless the rules for calculating this amount have changed there would have been no reason to rework the calculation.  Very frustrating at this point.

[radius]

It turns out that if you are self-employed and contribute to Traditional IRA and then you make a contribution to a Traditional SEP and file married-filing-jointly and the joint income is over $143k, TT will not deduct your Traditional IRA contribution anymore, so that is why you see an increase in the amount of taxes you owe (or a decrease, if the sum is green). You need to dig through the forms in TT to see this. Based on some research online, this seems to be correct: you can't contribute to both Traditional SEP and IRA if the joint income is over $143k. So, pick one, or contribute in Roth. 

[Bsch4477]

Yes, the SEP contribution is considered made by the employer and so deductibility is limited by that condition.