I have two sources of income in 2021; a regular job and a side gig doing some IT consulting
For the regular job I maxed out my ROTH 401k at work for 2021 and also maxed out the catch up (Im in my 50's).
For the side gig I made another 25k on during the year and i wanted to put $5000 of the side gig monies into a SEP-IRA that I have at my brokerage. When I entered the 5K amount as a SEP contribution Turbotax told me that I was over the limit and this amount should be reduced/removed.. This doesnt seem right - it seems to be treating the monies from my job against the SEP limit.
I am seeking guidance if this is correct - I thought SEP limit was completely separate from the Roth 401 I have at my job?
It is completely separate so are you entering the SEP in the correct place in the program ? It is NOT entered in the IRA section. And did you have enough profits on the Sch C ? Use the Print Center to review the SEP worksheet.
Click on Tax Tools on the left side of the online program screen. Then click on Print Center. Then click on Print, save or preview this year's return.
Choose the option Include government and TurboTax worksheets
your SEP contribution will be based on your net income on Schedule C.
Press the "Maximize my SEP contribution" button after your tax return is complete in all other respects.
thanks to those that replied, figured it out. It turns out the problem is that with the SEP contribution I would have been making zero as net income. I had thought SEP-IRA was based on gross, not net. Dumb on my part but I figured I would post here for anyone else who runs into the same issue.
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