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Financial Planning / Tax Strategies
|Subject: Re: IRA, Roth IRA, and SEP||Date: 1/15/2014 8:21 PM|
|Author: TMFPMarti||Number: 119867 of 121572|
On a related note, is there an advantage/difference between an IRA or SEP, or are they functionally equivalent but just have different limits?
A SEP is a way of getting money into a traditional IRA. Once it's there it behaves just like any other traditional IRA money.
Do either of them avoid the self employment tax, or the individual side of social security?
And with a ROTH/IRA you have up until tax day to make your contribution for the proceeding tax year. Is a SEP the same in that respect?
SEP contributions can be made up until the extended due date (October 15).
Sorry, I'm new to SEPs and the self employment tax in general, though truthfully I also can't remember if a standard 401k deduction avoids any of the various payroll taxes other than federal income.
It doesn't. Retirement plans available to the self-employed are covered in IRS Publication 560.
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