I need some advice.... I do consulting work in addition to my regular job and do not want to pay all that tax at the end of the year on 1099 type earnings.... would a sep ira be possible in this instance ?Thanks....
"I need some advice.... I do consulting work in addition to my regular job and do not want to pay all that tax at the end of the year on 1099 type earnings.... would a sep ira be possible in this instance ?" Yes. You can deduct about 15% of your self-employment income. You may also need to pay quarterly estimated taxes unless your withholding on your regular job covers 100% (110% if you are very well paid) of your 2000 taxes. You may also need to make state estimated tax payments. Good luck! Chris
I have asked this question as well.....here was my question and Pixy's answer:Subject: Re: SEP IRA AND 401KGreetings, Soonergrad1, and welcome. You asked:I also have about $20,000 per year in self employment (1099) income. Eventhough I am covered by a retirement plan at work, can I still contributeto a SEP-IRA? I am already maxing out a Roth IRA. Want to contribute toSEP-IRA and have my employer's retirement plan, but don't know if I wouldget in trouble for the SEP because I am already covered by a retirementplan. I have looked through the IRS pubs and this is not addressed.Rest easy. You may contribute to both a Roth IRA and a SEP-IRA even if youare covered by the retirement plan at another place of work.Your SEP-IRA contribution will be based on your self-employed earningsonly, and the pre-tax contribution will max out at about 13.04% of thegross from that work.Regards..Pixy
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