Side income and SEP IRA contibution

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am
Posts: 4232
Joined: Sun Sep 30, 2007 9:55 am

Side income and SEP IRA contibution

Post by am »

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.
SteveKL
Posts: 500
Joined: Mon Sep 03, 2012 8:13 pm

Re: Side income and SEP IRA contibution

Post by SteveKL »

SEPs are established by a company for its employees: http://www.irs.gov/Retirement-Plans/Pla ... -%28SEP%29
pshonore
Posts: 8205
Joined: Sun Jun 28, 2009 2:21 pm

Re: Side income and SEP IRA contibution

Post by pshonore »

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.
Spirit Rider
Posts: 13977
Joined: Fri Mar 02, 2007 1:39 pm

Re: Side income and SEP IRA contibution

Post by Spirit Rider »

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.
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