How to calculate SEP IRA contributions for self employed

[@matthewchevalier4769]

Thank you for this video. My accountant couldn't be bothered to explain to me why it was 20% instead of 25% He just said "it's been like that since 1957", which was not reassuring. Thank you for this service!

[@TravisSickle]

time for a new accountant.

[@nickp5115]

Took me a long time to find this. Very helpful

[@Earl-x8u]

Thank you for this helpful video. Seriously appreciated it.

[@missminty1996]

Thank you so much for the tutorial!! I’m opening a SEP for the first time this year and this cleared up all of my confusion 😄

[@Lucidiousness]

Much Appreciated. Very clearly stated. You earned my subscription. I'm about to check out your entire catalog. Many Thanks!

[@basketballion]

Good demo. I’ve been taught to just memorize the magic numbers on this. 18.59 for 25%, 12.12 for 15%. Nice to understand where these numbers come from though

[@chrispyd603]

This video was so helpful. Thank you Travis.

[@wordswithchung]

This was immensely helpful. Thank you so much!

[@marysansom4695]

Awesome SEP Calc Video!! You are so easy to follow!!

[@TravisSickle]

Thank you! Also checkout my videos on solo 401k and why they are better than the SEP.

[@margom.8901]

Excellent explanation!

[@MonicaSaffri]

Great explanation! Thank you!

[@Bilh254]

wow! Man you are amazing. Thank you for the help!!!

[@Virtues162]

Great video ! When you are self employed, you can contribute both as an employer and employee! Doesn't that mean you can multiply the contribution limit you came up with by 2, 18587x2 = 37174? Many thanks for your help!

[@gpn5011]

Great video. Thank you

[@randalrichey6408]

Nicely done!

[@lindanachtigal6215]

Thank you so much for doing this!!!!

[@hugoenriquez9318]

Do you have a video for S Corp?

[@saieda7637]

Thank you!

[@Danimal-3D]

Excellent video. Do you have anything with HOW the transaction the employer funds the SEP IRA? As an owner (S-Corp) Does the company issue a check to the employee (self) and the employee (self) then needs to deposit the funds into the SEP?

[@TravisSickle]

July 17, 2023

[@RoseNegrete]

Thank you and great video! So for a self-employed sole proprietor the max contribution is just 20%. What about for 2020? Not exceeding the lesser of 20% or $57,000? Or it still stays at 20%?

[@TravisSickle]

It’s not always 20%. If you earn over social security threshold the math is a little different. The caps are both $57k and 20%. Whichever is less. Depending on income, s-Corp may make more sense if you want to max fund.

[@jamesk2462]

Question.... What about if your spouse is an employee? Is the matched contribution to them also used to lower taxable income? i.e. I contribute 15% to my SEP IRA as the employer and then also 15% to my spouse as an employee. Are both deductible and lower my taxable income?

[@TravisSickle]

If made to the traditional sep yes. There is also a new Roth sep. which would be after tax.

[@Bitster]

Is there a catch-up associated with a SEP? I am a freelance consultant. I have already contributed the maximum and catch-up to a Roth IRA. Great video. Thank you.

[@Mac10943]

I think you forgot to put the links to the Schedule C and Schedule SE forms in the description

[@sarahladley2821]

thank you! how do you also calculate the employer contributon for qualified employees? I am starting a SEP this year, and just do not understand how to use the employer contribution for the employees (and myself) as a deduction.

[@TravisSickle]

It’s an expanse for the business. The math for employees is simple. Contribution rate x w2 earnings.

[@paullemiremusic3101]

What happens when there’s been an over contribution to a SEP ? That is, how is it rectified to the allowable contribution, say , upon seeing my CPA next year? (I just know I’m going to miscalculate by a grand or two!)

[@GymWithJaz]

Thank Youuu!

[@georgeslupski5987]

Thanks for video. I get confused when you say "employer". I do not have a biz. I have worked 38 yrs as an employer. But now I am paid in all cash (I teach golf ). Does your video apply to me or do I have to have a biz?

[@TravisSickle]

It depends. It sounds like you're an independent contractor which would mean you're a small business owner. If you don't have a business name or registered as a business then you're a sole proprietor. Same thing for this purpose. I would suggest you get a business name for liability purposes alone.

[@Edgeofdavid]

Thanls. I was quite confused as to how much to put in my sep ira vs my dividend portfolio. I always wondered why people just did not put everything into a sep and now i know. Youre limited based on how much you make each year.

[@TravisSickle]

The solo 401k is better.

[@tomoko4387]

Thank you so much for the explanation! Subscribed! I'm self-employed/no employees, and recently established a SEP. I have already filed my tax for 2020 in Feb, and obviously I didn't report any SEP contribution. Is it still possible to contribute to my SEP for 2020 (now that I can clearly know the exact amount I can contribute for that year). or is it too late, and I should start contributing in 2021? Thank you.

[@TravisSickle]

You can file an amendment but go checkout the solo 401k videos first. It might be a better plan for you. I just posted a bunch

[@tomoko4387]

@@TravisSickle Thank you so much Travis! I'll do that. I'll also look for youtube videos on how to file an amendment with IRS haha

[@snowfirel7108]

Sent you a note Trav. tks.

[@TravisSickle]

Saw it. Just replied to email

[@BW-kv9wj]

Can I contribute to a traditional Ira and SEP and max both out???

[@TravisSickle]

Possibly, just depends on income limits. This is a good question and I’ll do a video on this.

[@BW-kv9wj]

@@TravisSickle Thanks. I wanna be able to put money into Traditional before Dec 31, but if I’m not allowed I won’t put any in and just do the Sep

[@TravisSickle]

Ok, are you trying to contribute as much as possible or just $6k?

[@BW-kv9wj]

@@TravisSickle $7000 if im allowed. I’m over 50. And 20% into Sep

[@TravisSickle]

Checkout a solo 401k. I have videos on it.

[@daviethetaxlady]

If I just started my business as a sole-prop, and earned $600K on my W2 job, but only $5k in my new biz can I still deduct up to $58,000 for my SEP for myself

[@TravisSickle]

No, it has to be the plan attached to the income

[@TravisSickle]

The limit is 100% of plan comp or 66k (limits for 2023 went up) whichever is less.