SEP-IRA and Adjustments to Income

[charsmith20]

I've entered an amount as a SEP-IRA contribution but this amount does not show up on Schedule 1 line 15.  In other words, I am not getting any immediate tax benefit from my 2020 contribution because it is not increasing my adjustments to income.

[KathrynG3]

To explain why the SEP-IRA contribution amount is not showing on Schedule 1 Line 15, be sure you are meeting the requirements and within the allowable limits.

For more information, see IRS: SEP Plan FAQs - Contributions which states in part:

The most you can deduct on your business’s tax return for contributions to your employees’ SEP-IRAs is the lesser of your contributions or 25% of compensation.

Compensation considered for each employee is limited and subject to annual cost-of-living adjustments).

If you are self-employed and contribute to your own SEP-IRA, there is a special computation to figure the maximum deduction.

For more information, see: Where do I enter my SEP IRA contributions?

[charsmith20]

Thanks Kathryn.  I've double checked the SEP contribution calculation and I am below the 20% max ($7,000 contribution against $36,700 business income as seen on Schedule 1 line 3).  In TurboTax, line 15 on Schedule 1 shows "$0" although I have input the $7,000 contribution in the program.  

Is there a glitch in TurboTax or am I misunderstanding how SEP contributions work?

[dmertz]

Perhaps you've mistakenly entered the SEP contribution under Deductions & Credits as a regular traditional IRA contribution.  Make sure that you have entered it under Wages & Income -> Business Items -> Business Deductions and Credits -> Self-employed retirement plans.

[charsmith20]

Good idea.  I double checked and my contribution is identified as a SEP, not a traditional IRA.

Obviously I am inputting something incorrectly or there is a software glitch.  Is there a way that someone from Intuit/Turbotax can actually look at my TurboTax file and see where the hang-up is located?