A Simplified Employee Pension or SEP plan lets small business owners make tax-free contributions toward their employees’ retirement account, but SEP IRA accounts can also offer significant tax savings on income. A Simplified Employee Pension or SEP plan lets small business owners make contributions free of tax toward their employees’ retirement plan, but SEP IRA accounts can also offer significant tax savings on income.
If you’re self-employed, running a small business, or making money aside from regular income at work, a SEP IRA contributions can help you increase your tax-deferred retirement savings. Reducing your tax bill and maxing out your contributions every year can help you build a larger nest egg by the time you retire.
Here’s how a SEP IRA can help you save on taxes and boost your retirement savings:
Take control of your financial future now.
Rick Pendykoski is the owner of Self Directed Retirement Plans LLC, a retirement planning company based in Goodyear, AZ. He has over three decades of experience working with investments and retirement planning, and over the last ten years has turned his focus to self-directed ira accounts and alternative investments. If you need help and guidance with traditional or alternative investments, call him today (866) 639-0066.
On turbotax I entered my SEP IRA contribution as the last step of filing. It turned by tax refund into a tax debt losing me almost $1000. Why did that happen?
Hi Lyn, this is not in our wheelhouse to answer.
Rick, if my C-Corp business pays me (the 100% stock holder) a capital gains payout, does that amount count towards my eligible amount for calculating a SEP contribution? For example, $175,000 is considered capital gains and $50,000 is ordinary income. Is the SEP amount based on just the $50,000.
Would appreciate if you actually email me your reply. Many thanks.
I am not a tax expert by any means but I think you are correct – IRA contributions come from “earned” income and Capital Gains is taxed differently than earned income.