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Lev, Tax Preparer
Category: Finance
Satisfied Customers: 28081
Experience:  Personal Investment, Tax Preparation
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I have a sep ira, i have a fixed rate annuity inside the ira.

Customer Question

I have a sep ira, i have a fixed rate annuity inside the ira. My question is after i max out my contributions for tax deductions can i contribute to the annuity with non deductable contributions?
Submitted: 6 months ago.
Category: Finance
Expert:  Lev replied 6 months ago.
If annuity is inside SEP IRA - you may not contribute into annuity without contributing into SEP IRA...So technically that woudl be like making contributions into SEP - and after that use funds to contribute into annuity.So - the question is whether you are eligible to make contribution into SEP?Generally SEP contributions are allowed by employers only. However - if you are self-employed - you may make your own contributions based on your self-employment income. Because a SEP-IRA is a traditional IRA, you may be able to make regular, annual IRA contributions to this IRA, rather than opening a separate IRA account. The due date for such contribution is Apr 18, 2016 (due date of your tax return)Whether that last contribution is deductible or not - depends on your circumstances.
Customer: replied 6 months ago.
Yes im a self employed owner of company. Since thr annuity is tax deffered what would be the difference if i put funds in that are deducatable, and then once i reached max after making calculations i contributed into annuity as non qualified. On my tax return each year i would be able to see how much i have put in as qualified money vs non. The annuity would grow more if i kept it all in one. Your thoughts
Expert:  Lev replied 6 months ago.
If annuity that is inside SEP IRA woudl be treated differently - regardless what type of annuity you have.- you may NOT contribute into annuity without contributing into SEP IRA.That is regardless what type of annuity you have.
Expert:  Lev replied 6 months ago.
You may not have a part of annuity inside the SEP and a part of annuity outside the SEP.What you may do - to make your regular IRA contribution into your SEP account - but you need to tell the administrator - that is regular IRA contribution...I appreciate if you take a moment to rate the answer.Experts are ONLY credited when answers are rated positively.If you still have any doubts, need clarification - please be sure to ask.I am here to help you with all tax related issues.