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Level 2
posted Apr 9, 2021 5:22:37 AM

SEP IRA

Hello:

 

This year a majority of my income is from being an independent contractor.  I paid an assistant around 8K for help in 2020.  I have made $171K per my 1099-NEC.  plus around 46K per W-2 forms.  I also have dividends and interest .(I have no capital gains this year)   I know the deadline has been pushed back to May 17th for a contribution to a SEP-IRA.  How much can I contribute to my SEP IRA is 2020?

 

0 3 656
2 Best answers
Employee Tax Expert
Apr 9, 2021 2:57:29 PM

Your allowable Sep contribution is based on your net income from self-employment and factors in your self-employment tax. The best way to determine how much you can contribute is to use the Self-employed Retirement routine in TurboTax, which you will find in the business section on the screen that says Let's gather your Business Info. You will see an option to maximize your SEP contribution.

 

Expert Alumni
Apr 11, 2021 1:06:03 PM

Yes, you can make more than one contribution to your SEP-IRA as long as you do not exceed the maximum amount allowed as a contribution.

3 Replies
Employee Tax Expert
Apr 9, 2021 2:57:29 PM

Your allowable Sep contribution is based on your net income from self-employment and factors in your self-employment tax. The best way to determine how much you can contribute is to use the Self-employed Retirement routine in TurboTax, which you will find in the business section on the screen that says Let's gather your Business Info. You will see an option to maximize your SEP contribution.

 

Level 2
Apr 10, 2021 10:07:49 AM

Thank you for your answer.  It was extremely helpful.

 

But can you make more than one contribution to a SEP-IRA for 2020, or can you only make one contribution?

 

Please advise and thanks.

Expert Alumni
Apr 11, 2021 1:06:03 PM

Yes, you can make more than one contribution to your SEP-IRA as long as you do not exceed the maximum amount allowed as a contribution.