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

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

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
2561 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
956 posts

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


Thanks tigeryat





Back to top
  Replies (0)
Broke
LSU Fan
AKA Buttercup
Member since Sep 2006
57246 posts
 Online 

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
956 posts

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
2561 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
  Replies (0)
makersmark1
Auburn Fan
Member since Oct 2011
1940 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
  Replies (0)


Back to top