SEP IRA snafu

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SEP IRA snafu

Postby gravlax » Fri Apr 05, 2013 2:56 pm

I'm trying to Google my way through some SEP IRA questions I have, but to no avail. Here is my scenario:

* I work fulltime as a W2 employee, and contributed the max $5K to my traditional IRA fro 2012.
* I also have a side business in which I get 1099 income. After expenses, I took in $10K in 2012.
* I've already completed my taxes for 2012.

However, I just received an unexpected small windfall. I'm wondering if I can still contribute to a SEP-IRA for 2012, and how much.

Any ideas?
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Re: SEP IRA snafu

Postby mah001 » Fri Apr 05, 2013 3:13 pm

You can still contribute. Assuming you didn't earn more than Social Security taxable wage base in total, I get $1,847 as the deductible SEP contribution. That's 20% {(10,000-(.0765x10000)}. Check: "Self employment wage" = 10,000-765-1847, or $7,388. 25% of 7388 = 1847. 7.65% is EMPLOYER portion of s.e. tax.
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