The base rate of 25% must be adjusted to 20% for a self-employed individual because the SEP contribution is an employer contribution that effectively reduces net earnings. The maximum SEP contribution for a self-employed individual is 20% of net earnings. Net earnings are net profit minus the deductible portion of self-employment taxes.
Excess SEP contributions are subject to a 10% excess-contribution penalty on Form 5330. TurboTax does not support Form 5330.