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I have a question about whether or not I am eligible to open…

Customer Question
Hi Pearl, I have...

Hi Pearl, I have a question about whether or not I am eligible to open a SEP IRA.

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

I have full time employment that is 401k eligible. However, I also receive 1099 MISC income from another firm as a third party contractor. I also have expenses for that work.

Accountant's Assistant: Is there anything else important you think the Accountant should know?

Not yet

Submitted: 8 months ago.Category: Finance
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Answered in 7 minutes by:
12/20/2017
Financial Professional: Lev, Tax Preparer replied 8 months ago
Lev
Lev, Tax Preparer
Category: Finance
Satisfied Customers: 33,362
Experience: Personal Investment, Tax Preparation
Verified

You may have several qualified retirement plans and make contribution to each of them.
That is not an issue.
You may have SEP IRA account and make contribution based on your self-employment income.

Your maximum contribution will be based on your NET self-employment income (after all deductions) as reported on schedule C and form 1040 line 12.

I might suggest to use following calculator to determine the maximum allowed contribution

https://scs.fidelity.com/products/mobile/sepMobile.shtml

Please be aware that TOTAL SEP contribution and contributions into 401k for 2017 is limited to $54,000.

Let me know if you need any help with determination.

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Customer reply replied 8 months ago
Lev, one nuance is that the income I am getting paid comes from a company that I used to work for as a full-time employee. The now pay me 1099-MISC income. To make matters more complicated. That group and my current employer have common ownership. Does that chance anything?
Financial Professional: Lev, Tax Preparer replied 8 months ago

That will NOT make ANY difference.

You still may have several retirement plans and may contribute to all of them.

The ONLY issue is to determine the limit of your contribution based on compensation - and not to over-contribute.

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Financial Professional: Lev, Tax Preparer replied 8 months ago

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 Social Security / Tax related issues.

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