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re: Best small business retirement account contribution rate for President/ owners?
Posted on 1/6/24 at 7:17 pm to slackster
Posted on 1/6/24 at 7:17 pm to slackster
I am being vague, I was trying to be simplistic. My understanding is that Sep contributions also are considered net earnings.
I’ll need to look further into my calculations, you’ve certainly brought up some valid points and suggestions. My numbers are simply to provide comparable income to retirement contribution limits.
But yes I’ve been doing over $30,000 which is beyond what my foreseeable future will allow?
ETA: there’s no reason this crap shouldn’t be in a spread sheet. Put anything unknown into its own and either allowed or not allowed and revisit yearly. Fricking ridiculous
I’ll need to look further into my calculations, you’ve certainly brought up some valid points and suggestions. My numbers are simply to provide comparable income to retirement contribution limits.
But yes I’ve been doing over $30,000 which is beyond what my foreseeable future will allow?
ETA: there’s no reason this crap shouldn’t be in a spread sheet. Put anything unknown into its own and either allowed or not allowed and revisit yearly. Fricking ridiculous
This post was edited on 1/6/24 at 7:21 pm
2
Posted on 1/6/24 at 7:41 pm to baldona
quote:
My understanding is that Sep contributions also are considered net earnings.
They’re not. They are deducted from net earnings just like 1/2 SE tax has to be deducted to get to net earnings too.
quote:
I’ll need to look further into my calculations, you’ve certainly brought up some valid points and suggestions. My numbers are simply to provide comparable income to retirement contribution limits.
In your $100k example you could actually contribute more to a 401k than you could to a SEP. the employee could contribute $23k or $30,500 if 50+. Employer could also make contributions as a percentage of income for employees. You could make it something like 10% and put more into 401k than you are into the SEP.
You could also just keep your SEP maxed out and do the same for your employee.
Ultimately it’s going to come down to administrative cost and how generous you want to be.
Posted on 1/6/24 at 7:44 pm to baldona
quote:
ETA: there’s no reason this crap shouldn’t be in a spread sheet. Put anything unknown into its own and either allowed or not allowed and revisit yearly. Fricking ridiculous
Couldn’t agree with this more.
It should be as simple as “take Line N income, multiply by X%, and that’s your SEP deduction.”
The idea you have to read multiple form instructions and publications to figure it out is fricking insane. Net income from self employment is needed for SEP, but isn’t defined in SEP publication.
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