SEP-IRA - How much Income is needed to max out? | TigerDroppings.com

Posted byMessage
ynlvr
LSU Fan
Baton Rouge
Member since Feb 2009
848 posts
 Online 

SEP-IRA - How much Income is needed to max out?


I am looking for a quick opinion from tax savvy MT posters before conferring with my CPA.

So, if I have a small business (S Corp) and I pay myself and spouse as the only employees of the business, how much income do I need to pay us each to max out on the $50,000 (2012) SEP-IRA plan? Is it simply $200,000 each? Or do I need to include the $50,000 SEP-IRA payment in my gross income? The language is a little squirrely for my taste as is all things IRS. Any competent help on this subject is appreciated.







Back to top
Share:
tigeryat
LSU Fan
God's Country
Member since Oct 2005
2540 posts

re: SEP-IRA - How much Income is needed to max out?


$200,000.

I think you are reading about the calculation for self employed taxpayers, which you are not.






Back to top
ynlvr
LSU Fan
Baton Rouge
Member since Feb 2009
848 posts
 Online 

re: SEP-IRA - How much Income is needed to max out?


Thanks tigeryat





Back to top
Broke
LSU Fan
AKA Buttercup
Member since Sep 2006
55415 posts

re: SEP-IRA - How much Income is needed to max out?


May want to consider a Simple instead.





Back to top
ynlvr
LSU Fan
Baton Rouge
Member since Feb 2009
848 posts
 Online 

re: SEP-IRA - How much Income is needed to max out?


Don't Simples max out at $11,500? SEP-IRA allows me up to $50,000. The catch-up provision is larger with the Simple but still doesn't nearly catch me up to the $50k the way I understand the two vehicles.





Back to top
tigeryat
LSU Fan
God's Country
Member since Oct 2005
2540 posts

re: SEP-IRA - How much Income is needed to max out?


quote:

Don't Simples max out at $11,500? SEP-IRA allows me up to $50,000.


Correct.






Back to top
makersmark1
Auburn Fan
Member since Oct 2011
1405 posts

re: SEP-IRA - How much Income is needed to max out?


get a solo 401k and it is easier to max.

You get 17K as an "employer contribution"
then up to 25% of "net profits" up to an additional 33K'

so total is 50k, but this works better if you come up short of max money because you get 17 k off the top then 25% of any profits.

Fidelity explains it better






Back to top


Back to top




//