SEP IRA if in a company plan
My client is a 69-year old attorney. For 2016, he received substantial W-2 income from an employer and was a participant in the company 401(k) plan; he did not own any part of the employer. He also had about $50,000 net earnings from self-employment from an unrelated business (his law firm). Can he set up a SEP IRA before April 18, 2016 and make a deductible contribution?
Based on $50,000 net earnings, what would be the amount of the deduction?
Permalink Submitted by Alan - IRA critic on Sat, 2017-04-01 18:27
Client can open the SEP IRA up to the due date plus extensions for filing the 2016 return. He can make the SEP contribution, but will probably need to use tax software to determine his max. Due to the W-2 income, this link explains how it relates to the SE tax. https://ttlc.intuit.com/questions/2914761-do-you-have-to-pay-self-employment-tax-if-you-also-have-income-thru-a-w-2