SEP IRA Question: I've been told no question is stupid, so
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SEP IRA Question: I've been told no question is stupid, so
the tax deadline is approaching. I am self employed and have in the past contributed to a SEP IRA. This year I have a big building project that I've been saving for and don't really have the funds to put into my SEP. Is it possible and/or am I allowed to sell some stocks in my brokerage account to fund the SEP for 2022? My gut instinct is that it isn't permitted but I thought I'd check.
Thanks
Thanks
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Re: SEP IRA Question: I've been told no question is stupid, so
Sure, you just will owe taxes on the gains (if any) in the brokerage when you sell the shares
Re: SEP IRA Question: I've been told no question is stupid, so
This comes under the “money is fungible” doctrine.
https://learn.robinhood.com/articles/6e ... ngibility/#
https://learn.robinhood.com/articles/6e ... ngibility/#
Re: SEP IRA Question: I've been told no question is stupid, so
^ right.
The relevant rule is that you need $X in compensation/earned income to contribute $X to the SEP IRA. That doesn't mean that $X must literally/virtually come out of your paycheck or bank account where your paycheck was deposited to. It's not like the IRS or your IRA custodian is tracking where the money "came from."
The relevant rule is that you need $X in compensation/earned income to contribute $X to the SEP IRA. That doesn't mean that $X must literally/virtually come out of your paycheck or bank account where your paycheck was deposited to. It's not like the IRS or your IRA custodian is tracking where the money "came from."
Re: SEP IRA Question: I've been told no question is stupid, so
Taxable brokerage is perfect. You will probably need to transfer to your bank then transfer again to the Sep, unless both accounts are at same provider.
Also any chance you have losses in the taxable brokerage?
Also any chance you have losses in the taxable brokerage?
John |
* Friends and family and money |
* What you recommend will have periods of underperformance. You will be blamed. |
* You avoid the suspicion of "self-serving." by Taylor Larimore
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Re: SEP IRA Question: I've been told no question is stupid, so
No losses, but I have one holding with rather minimal gains. I've just reached out to my accountant to get his take on all of this. Like is it worth the write-off to max my SEP even though it would raise my income and I'd be realizing gains? It's a little above my pay grade!
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Re: SEP IRA Question: I've been told no question is stupid, so
Thanks for the linkmhalley wrote: ↑Tue Mar 21, 2023 3:29 pm This comes under the “money is fungible” doctrine.
https://learn.robinhood.com/articles/6e ... ngibility/#
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Re: SEP IRA Question: I've been told no question is stupid, so
Yeah, thats one of the complicating factors. Weighing whether it's worth it or not.Evergreen2022 wrote: ↑Tue Mar 21, 2023 1:00 pm Sure, you just will owe taxes on the gains (if any) in the brokerage when you sell the shares
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Re: SEP IRA Question: I've been told no question is stupid, so
cool, thankssycamore wrote: ↑Tue Mar 21, 2023 3:44 pm ^ right.
The relevant rule is that you need $X in compensation/earned income to contribute $X to the SEP IRA. That doesn't mean that $X must literally/virtually come out of your paycheck or bank account where your paycheck was deposited to. It's not like the IRS or your IRA custodian is tracking where the money "came from."
Re: SEP IRA Question: I've been told no question is stupid, so
Realizing gains depends on your tax status. Did you get the bonds out of your taxable, they are a tax drag?redbarnyard wrote: ↑Wed Mar 22, 2023 7:04 amNo losses, but I have one holding with rather minimal gains. I've just reached out to my accountant to get his take on all of this. Like is it worth the write-off to max my SEP even though it would raise my income and I'd be realizing gains? It's a little above my pay grade!
John |
* Friends and family and money |
* What you recommend will have periods of underperformance. You will be blamed. |
* You avoid the suspicion of "self-serving." by Taylor Larimore
Re: SEP IRA Question: I've been told no question is stupid, so
My hunch would be it is still a good idea. You contribute your self employment income to SEP IRA and get the deduction as usual. You use taxable account to pay for building project (which I assume is not associated with your self employment) and pay capital gains tax on it. My guess is you come out ahead doing this. But I could be wrong. I'm not a tax expert!redbarnyard wrote: ↑Wed Mar 22, 2023 7:06 amYeah, thats one of the complicating factors. Weighing whether it's worth it or not.Evergreen2022 wrote: ↑Tue Mar 21, 2023 1:00 pm Sure, you just will owe taxes on the gains (if any) in the brokerage when you sell the shares
As stated above, money is fungible. But not always. I'm pretty sure you have to have self employment income to put it into a sep ira.
It will be interesting to find out what your accountant thinks. Are they tax experts?
Retired 2019. So far, so good. I want to wake up every morning. But I want to die in my sleep. Just another conundrum. I think the solution might be afternoon naps ;)
Re: SEP IRA Question: I've been told no question is stupid, so
You can do this, or you can just file for a fed tax return extension and have until October to make your contribution. Maybe you'll have more cash available by then.redbarnyard wrote: ↑Tue Mar 21, 2023 12:49 pm the tax deadline is approaching. I am self employed and have in the past contributed to a SEP IRA. This year I have a big building project that I've been saving for and don't really have the funds to put into my SEP. Is it possible and/or am I allowed to sell some stocks in my brokerage account to fund the SEP for 2022? My gut instinct is that it isn't permitted but I thought I'd check.