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Megan C
Megan C, Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16576
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Good afternoon, I am self-employed (in a one-person LLC)

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Good afternoon,
I am self-employed (in a one-person LLC) and file a schedule C to pay my taxes. I am trying to figure what is the maximum allowable SEP IRA contribution I can make for 2012. I am told that I need to take my "net self-employment income minus half of the social security tax."

1. Is this correct?
2. Is the "net self-employmnet income" the NET PROFIT which appear on line 31 of my Schedule C?

Thank you XXXXX
Thank you for your question, and thanks for using I can do you one better - I have a link to a calculator that will calculate this for you. You can CLICK HERE to access.

All you do is enter your net profit from your schedule C and it does the rest - it will tell you the max 401K contribution, SIMPLE, and SEP contribution - just make sure you're looking at the right line when you read the results. The calculator will figure in your self employment tax deduction and everything. All you need to do is enter the net profit in the formula.

I sincerely XXXXX XXXXX makes things easier for you. Please let me know if we can be of any additional assistance. Thanks again for using and have a happy, and safe, 2013.

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You should be aware that your question, as with most tax questions, can never really be answered completely...addressing all the permutations; that is because of the many assumptions that have to be made I have done my best to determine what I think you are asking and answering it in the most direct and understandable manner possible. If, however, after reviewing the questions, you have any uncertainties or further questions, please do not hesitate to ask.

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