SEP-Deduction with a loss
Client S corp had a loss of approx. 15K
But W2 income of $42,000
Can client make deduction on W2 income? How much. If not will use IRA $6,500 deduction.
Thanks
Client S corp had a loss of approx. 15K
But W2 income of $42,000
Can client make deduction on W2 income? How much. If not will use IRA $6,500 deduction.
Thanks
Permalink Submitted by Alan - IRA critic on Mon, 2016-04-18 22:12
SEP contribution limit 25% of W-2 wages or 10,500.
Permalink Submitted by steve jackson on Tue, 2016-04-19 15:17
ThanksJust to be safe and since last minute contribution did 6500 Traditonal contributon
Permalink Submitted by William Tuttle on Tue, 2016-04-19 03:59
The SEP IRA contrbution would not be a deduction to W-2 income, rather an S-Corp business expense further increasing the S-Corp’s losses.However, the abilty to deduct S-Corp losses on From 1040 are limited to any basis in the S-Corp. Which many S-Corps do not have. For this reason, it may be better to take the IRA deduction. How much of any basis does the S-Corp have?
Permalink Submitted by steve jackson on Tue, 2016-04-19 15:18
ThanksJust to be safe and since last minute contribution did 6500 Traditonal contributon