SEP-IRA
SEP-IRA Contributions
I have a client that had some one-time self-employment income and would benefit (tax wise) from establishing a SEP-IRA. This income is not expected to reoccur in the future. Can I make the contribution to his existing IRA instead of setting up a SEP-IRA, making the contribution to it and then transferring it to his IRA?
Permalink Submitted by Jose Morales on Wed, 2010-02-24 16:27
Making the SEP contribution into the existing traditional IRA is fine. What people call “SEP IRAs” are really nothing more than Traditional IRAs in which a SEP contribution has been made.
Permalink Submitted by mk foss on Thu, 2010-02-25 22:10
The person will want to fill out the SEP adoption form. This is not filed with the IRS but kept by the employee-owner of the self-employed business. The Form number is in the 5000 series – you can find it at http://www.irs.gov