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This is regarding contribution to SEP - contributions were

made for the years 2009...
This is regarding contribution to SEP - contributions were made for the years 2009 and 2010 while working as an independent contractor. During 2011 the independent contractor status changed to employee status effective from October 2011. Now what happens to the account.
Can we make more contributions to this account and take a deduction for the year 2011 on Sch. C.
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Answered in 13 minutes by:
4/1/2012
jgordosea
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3,161
Experience: I've prepared all types of taxes since 1987.
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Greetings,

 

The SEP is actually a traditional IRA that has the added function of allowing employer contributions.

 

You can continue to make contributions to the SEP only if you have income from self employment as a contractor. See http://www.irs.gov/retirement/participant/article/0,,id=211336,00.html

 

Or, you can combine the SEP into a traditional IRA and make contributions the same as any traditional IRA. Use a trustee to trustee transfer to avoid withholding.

See http://www.irs.gov/retirement/participant/article/0,,id=211358,00.html

 

Please ask if you need clarification.

Thank you.

jgordosea
jgordosea, Enrolled Agent
Category: Tax
Satisfied Customers: 3,161
Experience: I've prepared all types of taxes since 1987.
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