SEP Limit if over 70 1/2

[JTL13]

If over 70 with Schedule C business income, am I limited to an $8,000 SEP contribution for 2024? TurboTax calculated the maximum at $22,000, but Schwab states I'm limited to $8,000. Please advise.

[SusanY1]

$8,000 is the amount that can be contributed to a Traditional IRA, but with a Schedule C you have a higher contribution limit of the lesser of 20% of your net income from the business (25% of compensation, but it is adjusted for the contribution when self-employed) or $59,000.  It sounds like $22,000 is the amount that TurboTax has calculated based on your earnings from self-employment.

In addition to having a higher contribution limit, you also have more time to set up and contribute to a SEP-IRA (if needed) as long as you file an extension for your federal tax return.  Filing an extension (see File Tax Extension for Federal Taxes) gives you until October 15th to set up and contribute to the SEP-IRA, even if you file your return before that date.  

[JTL13]

Thank you! That’s what I was looking for.