Re: SEP plan for side business?

oprah.chopra@[EMAIL PROTECTED]
 writes:

> Is my yearly contribution limit still 25% of my business income ( i.e
> 10k , assuming 40k in side-business income )?

How is your business structured?  If it is a sole proprietor****p,
the limit is actually 20% of your net business income (net business
income is Sched C profit minus half the SE tax), not 25%.  (Well
technically it's 25%, but it's 25% of Sched C profit minus half the
SE tax minus the SEP contribution itself.  When you work out the
recursion,
it turns out to make the nominal 25% limit an actual 20% limit).

> Or is it lower since I max out my 401k?

Your 401(k) contributions as an employee have no effect
on SEP contributions.

--
Rich Carreiro                            rlc-news@[EMAIL PROTECTED]
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