sep-ira
my wife maxed out her roth ira for 2007. Now her employer tells her he has 2500 dollars to go toward a sep-ira. ho9w does she handle this transaction if the sep money is for 2007.
my wife maxed out her roth ira for 2007. Now her employer tells her he has 2500 dollars to go toward a sep-ira. ho9w does she handle this transaction if the sep money is for 2007.
Permalink Submitted by Margaret Stallworthy on Sat, 2008-01-26 17:06
She doesn’t need to worry about it. As long as the income requirements are met, she can make a full Roth IRA contribution – there is no adjustment for employer SEP-IRA contributions. Take a look at page 59 of Publication 590 and you will notice that it says that the maximum Roth contribution amount is reduced by the amount contributed to all other IRAs OTHER THAN (emphasis added) employer contributions under a SEP or SIMPLE.
So take the money and be happy.
Permalink Submitted by Denise Appleby on Sun, 2008-01-27 14:15
Also, since the Roth IRA contribution is nondeductible, it is not affected by the SEP IRA contribution.
On the other hand, if she had chosen to fund a traditional IRA, she would be considered an [url=http://www.retirementdictionary.com/active-participant.htm%5Dactive participant[/url]for the year that the SEP contribution was deposited to her SEP IRA, and would then need to determine if her traditional IRA contribution is deductible for that year