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[[I was laid off from my job in Feb. 1997, so paid into a 401k for two months of the tax year. I later
became employed as a consultant on a job-shop basis (e.g. no benefits of any kind) by two
different employers. It is my understanding that SEP IRA's were created for people like
job-shoppers and consultants who do not have any 401k available to them. Does my 2 months
participation in a 401k plan disqualify me from having a SEP IRA?]]

If you were pain on a consulting basis (i.e., via Form 1099 and NOT via Form W-2), you'll need to file Schedule C to report your business income and deductions. Your SEP contribution will be based solely on your net business income. The fact that you participated in your 401k for 1997 will not disqualify you from a SEP.

For additional information on self employed retirement plans, see IRS Publication 560 at the IRS web site.

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