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Started By
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Tax experts/IRA experts.
Posted on 1/31/24 at 1:33 pm
Posted on 1/31/24 at 1:33 pm
A question. I have emailed my CPA, he hasn't answered yet.
I'm self employed. I have a business in FL and a business in AL. Basically I'm W-2 and K-1 in both. The Florida company maxed out a SEP-IRA on me. $66k. Can I contribute to a separate traditional IRA tax deferred? Or am I maxed out?
I'm self employed. I have a business in FL and a business in AL. Basically I'm W-2 and K-1 in both. The Florida company maxed out a SEP-IRA on me. $66k. Can I contribute to a separate traditional IRA tax deferred? Or am I maxed out?
5
Posted on 1/31/24 at 1:46 pm to XenScott
You can contribute, the question is whether you can get a tax deduction. My hunch is you won't. Find your situation here: Tax Deductibility Limits
Posted on 1/31/24 at 3:04 pm to XenScott
I don’t see how you could make a tax deductible contribution since your individual income is obviously at least $330,000 to have a $66,000 SEP contribution. May be able to backdoor a Roth though.
ETA- as pointed out below SEP balance would still count for pro-rata backdoor contributions rendering them pretty much useless. Completely forgot about it in my post.
ETA- as pointed out below SEP balance would still count for pro-rata backdoor contributions rendering them pretty much useless. Completely forgot about it in my post.
This post was edited on 1/31/24 at 8:43 pm
Posted on 1/31/24 at 6:49 pm to slackster
quote:
May be able to backdoor a Roth though.
Do sep-iras no longer count towards the pro rata rule?
I know that you k
now can do sep ira roth contributions.
But I thought if trying to do the non deductible trad ira contribution -> roth conversion that form 8606 still accounts for trad sep ira amounts therefore you get hit with the pro rata rule still.
Posted on 1/31/24 at 7:52 pm to XenScott
Might want to look at some form of investment, outside of a qualified plan, that does not pay dividend or interest and concentrate on capital appreciation. All gains would unrealized until a sale occurs and be taxed at favorable capital gains rates at that time.
Posted on 1/31/24 at 8:41 pm to Puffoluffagus
quote:
Do sep-iras no longer count towards the pro rata rule?
No they definitely count against I just completely forgot about it mid post. Good catch.
Posted on 1/31/24 at 10:39 pm to XenScott
quote:
Basically I'm W-2 and K-1 in both.
S Corp?
Might be time to look at a cash balance / defined benefit plan
Posted on 1/31/24 at 10:46 pm to XenScott
quote:
The Florida company maxed out a SEP-IRA on me. $66k. Can I contribute to a separate traditional IRA tax deferred? Or am I maxed out?
I think it's that amount of 25% of the salary with a cap (I think at or around 66k)
Posted on 2/1/24 at 10:31 am to LSUFanHouston
quote:
S Corp? Might be time to look at a cash balance / defined benefit plan
Yes S-Corp, both are S-Corp with different ownership in either. We are happy with where we are but taxation has become a huge burden. I’m just trying to figure out how to defer as much as possible.
Posted on 2/1/24 at 12:18 pm to XenScott
Cash balance would be your next step.
Posted on 2/1/24 at 1:02 pm to XenScott
S Corps aren't super for retirement contributions. You have to jack your salary higher to max out, which whittles away at the benefit of the S Corp.
Yes, cash balance might be your answer. Talk to your retirement plan company about this.
Yes, cash balance might be your answer. Talk to your retirement plan company about this.
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