SEP IRA contributions

[squidlady]

I have a question about SEP IRA contributions. I am self-employed (sole prop) and I have a couple of IRA's, one of which is a SEP. Each year I mail a check for whatever I want to contribute to the account for that year to the bank  holding my SEP. This year I got a Form 5498 from them, with the SEP box checked, showing the contribution I made in 2023, let's say it is $2,000.00.  When I am doing my taxes and TT asks if I have made a SEP contribution, do I enter that $2,000.00 from the form, or do I enter a different amount if I want to contribute now (and send then a check for that amount)?

OR - if I put the $2,000 into TT, do I mail my bank a check for $2,000? 

In other words, the Form 5498 that I got (which shows 2023 as the year) - is that for my 2022 contribution? I've always done my own taxes and have been self-employed since 1999, and never thought to ask this before. TIA.

[AnnetteB6 · Accepted solution]

The 2023 Form 5498 shows amounts contributed to your SEP IRA.  If you received it around May or June of 2023, then it was reporting the contribution that you made for tax year 2022.  This was already reported on your 2022 tax return.  The form has 2023 on it because that is the year it is being issued to you.

So, for your 2023 return, you can choose the appropriate amount that you wish to contribute to your SEP IRA based on your business income and report that amount on your return.  You do not need to report the $2000 shown on Form 5498.  

Whatever amount you decide to contribute, you should receive another Form 5498 around May or June 2024 showing the contribution to your SEP IRA.

To learn more, see the following TurboTax article:

What Is IRS Form 5498: IRA Contributions Information?
 

[squidlady]

Hi and thank you. I actually downloaded the form from my bank at tax time a couple of weeks ago  (so I can't say when I received it - in answer to your comment).

But I get what you said and understand that the contribution was for 2022 (and why the form says 2023). Thanks again.