Roth SEP with Secure Act 2.0

Submitted by Christopher Combs on Mon, 2024-09-30 12:30

Dear Alan et al,

Can a sole proprietor with a SEP plan make an employer contribution into the SEP plan, code it as a Roth contribution, and not deduct it from his/her business income?  Or, is the only Roth contribution that’s allowed into a SEP plan that which is an employee contribution?

Thanks,

Chris



Submitted by Alan - IRA critic on Mon, 2024-09-30 17:14

All SEP contributions are employer contributions, but if an IRA custodian can be located that supports Roth SEP contributions, a Roth SEP IRA can be opened at that custodian for the purposes of making Roth contributions. Form 5305 SEP can be used until amended by the IRS. Form 5498 issued by the Roth custodian should have the amount of the Roth SEP contribution shown in both boxes 8 and 10.

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