Hello, My wife does some "free-lance" work in the evening..Can we set a SEP IRA for her...amd contribute to this SEP IRA (according to maximum of plan) and another $2K in her own personal IRA? Or can she only contribute to 1 type of IRA or the other?Thanks...the JoserFool
[[My wife does some "free-lance" work in the evening..Can we set a SEP IRA for her...amd contribute to this SEP IRA (according to maximum of plan) and another $2K in her own personal IRA? Or can she only contribute to 1 type of IRA or the other?]]You can certainly contribute to a SEP, if you have qualifying income (and it sounds like you do). The problem is, your SEP will be treated as a qualified retirement plan for IRA income testing rules. This means that if your AGI is greater than $40k for 1997, your IRA deduction may be reduced or eliminated. But if your income is under the $40k limit, you would qualify for BOTH a SEP and an IRA in full.For additional information, check out IRS Publication 590 at the IRS web site.TMF TaxesRoySPECIAL NOTE: I try to answer as many questions as I can each week, and I generally select those that have not been asked before. If you don't get a detailed answer to your question, it is probably because my time is so limited during tax season, or because it has already been asked and answered in this folder in the past, or because it has been discussed in the Taxes Frequently Asked Questions area. In order to visit the Taxes FAQ area, go to the Fool's School area (http://www.fool.com/school.htm) and check out "Other Features" in the list box, OR you can jump directly to the Taxes FAQ area (http://www.fool.com/school/taxes/taxes.htm). Additionally, if any references were made to the IRS Web Site, you can get there by pointing your web browser to (http://www.irs.ustreas.gov)
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