Side income and SEP IRA contibution
Side income and SEP IRA contibution
I am a salaried W2 employee. I got a 1k check from a law firm for a deposition I did. No taxes were payed on this money. Can I make a SEP IRA contribution and for how much. Thanks.
Re: Side income and SEP IRA contibution
SEPs are established by a company for its employees: http://www.irs.gov/Retirement-Plans/Pla ... -%28SEP%29
Re: Side income and SEP IRA contibution
Sure, as long as you declare it as income on Scheule C and pay tax on it (and SE tax, if applicable). Your SEP contribution would be 20% of (net - 1/2 SE tax) or probably around $170. Mignt not be worth the hassle.
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Re: Side income and SEP IRA contibution
Also, I don't believe payment for a deposition would qualify as self-employment income. You are not in the business of giving depositions.
This should really be filed as "other income". This disadvantage is that this would not qualify and SEP IRA contribution. A silver lining of this disappointment is that you would not have to pay SE tax on it.
This should really be filed as "other income". This disadvantage is that this would not qualify and SEP IRA contribution. A silver lining of this disappointment is that you would not have to pay SE tax on it.