I offer consulting services to companies through my LLC entity in CA. I am trying to understand my options to minimize my tax burden on this income by contributing to SEP IRA or any other retirement plan for self-employed individuals.
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Yes, you can contribute to both an employer plan and a SEP IRA, as long as they are not both controlled by the same employer. Here are some great resources regarding Self-Employment retirement options. There are limits on what you can contribute to a SEP IRA. SEP IRA contributions allow for the lesser of either 25% of your compensation or $69,000 for 2024. For self-employed individuals, compensation is considered the lesser of your net earnings from self employment minus half of your self-employment tax, and then subtract the contribution for yourself to the plan.
IRS rules:
Everything you need to know about SEP IRAs:
IRS calculation methods:
Other options for Self-Employed Retirement Plans:
https://blog.turbotax.intuit.com/self-employed/can-the-self-employed-have-a-401k-31297/
Hope this helps!
Cindy
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