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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 77092  
Subject: Re: Funding a SEP-IRA Date: 2/21/2000 9:15 AM
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Greetings, Marcie4re, and welcome. You asked:

<<Can someone please explain to me what consequences there might be for over-funding a SEP-IRA? I want to contribute to my SEP-IRA, and I want to start the contribution for the 2000 tax year early (so I can start earning as early as possible). What penalties or other consequences are there when someone "over-funds" their SEP? I've never heard the answer to this, only that it's not a good thing. Can someone please explain?>>

You will find the explanation in Chapter 4 of IRS Publication 590 (Individual Retirement Arrangements) available for download at http://www.irs.ustreas.gov/prod/forms_pubs/index.html. Basically, you will be penalized 6% of the excess contribution each and every year that excess remains in the SEP-IRA.

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