Maximum Keogh Deduction

Forum|Forum|3 years ago
February 11, 2023
1 reply
7 views

I've completed my taxes except for the K-1 we'll be receiving. My wife retired last year (1 person business) and this will be the last K-1 we'll be receiving (ie, she is no longer a partner in the LLC.) I'm getting a tale of woe about when the K-1 will be available. I'd very much like to send in the Keogh contribution based on her regular income so we can roll it into a regular IRA and have more flexibility with it. I looked at last year's taxes and the income from the K-1 doesn't seem to enter into the maximum Keogh contribution calculation. But I'd like to make sure. So my question is: Does the income from a K-1 affect the maximum Keogh contribution from her regular income?

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MaryK4

Level 15

The K-1 income would not affect her KEOGH contribution from her self-employment business since it is based on income from that particular business. Any distributions from the partnership would not factor, however, if the partnership has a retirement plan, that may affect her overall contribution limit.

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TRWAuthor

Level 2

In the second sentence, did you mean to say "would factor" instead of "would not factor"? The partnership does not have any retirement plan.

PatriciaV

Level 15

Yes, if the partnership has a retirement plan or if your spouse has self-employment income reported on Schedule K-1, the maximum KEOGH contribution limit may be affected. Partnership distributions in general are not self-employment income.

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