Pay attention to the new tax bill as one feature may allow you to dramatically increase your contribution based on your self-employment income (BTW, Pixy is correct that you can maintain another plan based on your self-employment income. The only time that this can get dicey is if you have ownership in your employer - probably not your case).The new provision that I'm talking about is the increase in the defined contribution 415 limit from the lesser of 25% of Compensation to 100% of Compensation. I think that instead of a SEP-IRA you may need to move to a qualified plan; however, I'm assuming you're young with no employees of your outside business, so you could get away with a standardized prototype document from a brokerage house. Why would this change be significant to you?Assume 20,000 Net Income (let's ignore the SET deduction for the time being for simplicity's sake). Under current law, the best you could do would be $4,000 contribution (25% of the 20,000 less the contribution of 4,000). Under the proposed new law in effect for next year, you could do $10,000 contribution. This would entail moving to a money purchase plan which represents a fixed commitment each year (not a discretionary contribution) but if you're looking to shelter alot of your self-employment income you should keep this in mind.
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