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drsuperior11
Level 1

SEP Contribution - List on 1040 or Not?

I am a sole owner LLC that files an 1120-S and I receive a K-1 generated from TT Business.  On line 17 of the 1120-S it shows my SEP contribution.  However, the K-1 does not reflect it (nothing in box 13).  Thus, I assume that I should report the SEP contribution on the 1040 under the Keogh, SEP and SIMPLE Plans portion of TT - correct?

 

Appreciate the assistance!

4 Replies
MinhT1
Expert Alumni

SEP Contribution - List on 1040 or Not?

The SEP contribution is a deductible expense for your S-Corp and has been correctly reported on line 17 of form 1120S.

 

The SEP contribution is not reported on Schedule K-1 at all and you do not have to report it on your personal tax return (form 1040).

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drsuperior11
Level 1

SEP Contribution - List on 1040 or Not?

Thank you!

jtax
Level 9

SEP Contribution - List on 1040 or Not?

If you were self employed you would need to deduct the SEP-IRA contribution on your 1040. But as an s-corp owner you don't do that because it has already been deducted on the 1120-s and used to calculate the k-1 box 1. This is a good explanation. See the very end. https://www.upcounsel.com/sep-ira-for-s-corp

 

a little more detail:

 

K-1 (1120-S) box 13 is for credits. A SEP-IRA contribution is a deduction not a credit. See https://www.irs.gov/pub/irs-pdf/i1120ssk.pdf page 17-18 for info on Box 13.

 

On the 1120-S, line 17 is subtracted from the LLC (taxed as an S-Corp)'s income (along with other deductions) to arrive at line 21 ordinary business income/loss. Each owner's share of line 21 is reported on their K-1 box 1. 

 

So as you can see the SEP is reported on a K-1 line. It is already been used to reduce the business's income. You should not put it on your 1040.

 

Does that make sense?

 

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drsuperior11
Level 1

SEP Contribution - List on 1040 or Not?

Yes it does, and I appreciate the detailed reply!

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