SEP IRA, backdoor roth IRA for 1099 income?

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iloveblf
Posts: 1
Joined: Wed Oct 10, 2018 4:37 pm

SEP IRA, backdoor roth IRA for 1099 income?

Post by iloveblf » Thu Oct 11, 2018 12:04 pm

I think I made some mistakes and not sure how to handle it. I have both W2 and 1099 income as an independent contractor, I will have >100k 1099 contract income this year.

I opened up a SEP IRA acct early this year. I wanted to convert it to a Mega Backdoor Roth but realize this is not the way to do it. I have already maxed out a 403B with my W2 employer.

My question is, is my SEP IRA legal? Or can I convert it directly to a backdoor Roth IRA? I only contributed $5500 into the SEP IRA and now that markets are down, there is less than $5500 in the acct now.

I told my CPA about the SEP IRA but he is older, has made mistakes in the past and I don't know if he knows this stuff.

SRenaeP
Posts: 752
Joined: Tue Jan 19, 2010 9:05 pm

Re: SEP IRA, backdoor roth IRA for 1099 income?

Post by SRenaeP » Thu Oct 11, 2018 3:08 pm

If you have self-employment income (which you do, received via 1099), you are eligible to contribute to a SEP IRA.

Yes, you can convert the SEP to a Roth IRA if you desire. However, at your income level, it may not be the best course of action. Many more details of your situation would have to be taken into account.

Sounds like you need a new CPA.

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