SEP contribution :
Prospect calling asking to open and contribute to a SEP IRA for 2018 tax year. He is age 81. Has farm income, so unearned income. No employees he says. His tax preparer is telling him to put $8,000 into a SEP. I would need a Plan document. Does this mean he needs to have an LLP or LLC, Or some sort of business tax filing as well? (I understand the RMD he would also have to start) This just seems like a weird request. Thank you for insight
Permalink Submitted by Alan - IRA critic on Thu, 2019-03-28 15:26
You meant Farm income IS earned income, I assume. If he files Sch F and is self employed he can open a SEP IRA for 2018 and make the allowed contribution without a change of entity. If he is just starting this plan his contributions should be far more than his RMD.
Permalink Submitted by Kerry Schepers on Tue, 2019-04-02 21:48
Thank you, it’s rental income. I’ll ask the tax preparer about the schedule F. Thank you.