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Author: realcranky Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121572  
Subject: having a trad. IRA & SEP-IRA Date: 1/16/2006 11:16 AM
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Hello-

So, I'm self-employed (side business income) and also have a regular full time job. I am not covered by a retirement plan at this full time job. I have a traditional IRA to which I contribute the maximum ($4000).

If I start an SEP-IRA account for the year 2005, and contribute the maximum allowed given my business earnings - say my SEP-IRA contribution will be $6000:

1. I am assuming I can still have contributed the $4000 to my traditional IRA. Is this true? Or does the SEP contribution count towards the allowable traditional IRA contribution limit?

The IRS publications are confusing since in one place they indicate that self-employed individuals with multiple jobs may contribute to both to a traditional IRA and an SEP-IRA - but in other places they indicate that SEP-IRAs are to be considered as traditional IRAs (and therefore for the purposes of my "two" traditional IRAs I have a contribution limit of $4000 annually).

2. For the purposes of calculating my allowable tradtional IRA deduction, if I have an SEP-IRA for myself from my side business am I considered to be "covered by a retirement plan at work"?

Thanks!
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