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Author: travyil Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75890  
Subject: SEP or SIMPLE? Date: 10/30/2000 1:40 PM
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I expect to have about $6000 in self-employment/Schedule C income this year, but I also have W-2 income. I contribute to a Roth, but since I am only part-time I am NOT eligible for my employer's 401k. Am I still eligible to open and contribute to a SEP or Simple plan? And which one is more sensible if I expect to increase my self-employment income and decrease W-2 income over the next few years?
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Author: Crosenfield Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 25860 of 75890
Subject: Re: SEP or SIMPLE? Date: 10/30/2000 3:35 PM
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I know SEPs, but not SIMPLEs. When I was self employed I looked at both and decided on the SEP.
Anyone with self employment income can have a SEP.
If subsequently you become eligible for a 401k through your employer, and also have self-employment income, you can STILL contribute to that SEP.
There is a cap on how much you can contribute, but when I had around $100000 annually of self employment income I didn't hit the cap.
You can contribute about 15% of the Schedule C income. As you know, estimating that amount ahead of time can be tricky; you do the best you can and try to not overcontribute. If you undercontribute, you have some time in the next calendar year to bring your amount up to the maximum. If you overcontribute it gets hairy.
Best wishes, Chris

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