SEP Calculation Way Too High?

mboylan714 · ‎April 17, 2023

Hello...my gross self-employment income was about $80,000 / $63,750 after deductions. .

When I click 'Maximize' it is saying I am able to make a SEP contribution of about $26,000? This seem like WAY too much? Can you assist please? Been trying for a few days what I we are doing wrong? Using TurboTax Deluxe...

Thanks!

AliciaP1 · ‎April 17, 2023

It depends on how you are reporting your self-employment income. If you report on Schedule C the calculation for your maximum SEP contribution can be found at SEP Contributions. If you pay yourself a wage from your business and issue a W2 to yourself, the calculation is 25% of your W2 income with a maximum of $61,000 for 2022.

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