SEP and Traditional IRA contributions
Client, a real estate agent compensated on a 1099 basis, has been making maximum contributions to her traditional IRA. Can she also do a SEP IRA and, if she does, will it impact the deductibility of her traditional IRA contributions?
Thank You!
Permalink Submitted by Alan - IRA critic on Thu, 2015-03-26 17:34
She could adopt a SEP plan, but any contributions made to the plan are deemed to make her an active participant for the year IN WHICH the contribution is made. That in turn triggers modified AGI limits for deducting the TIRA contribution. If she does not qualify for a TIRA deduction, her income might still be low enough to contribute to a Roth IRA.