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TOF, in an otherwise excellent explanation of how to derive a SEP-IRA contribution for the self-employed, said in part:

<<It works out to 13.04348 percent. You do it like this. Take all your deductions except for the SEP IRA to see what your AGI would be. Let's say it is $10,000 for round numbers. Now ask yourself the question, "What do I subtact from $10,000 so that what is subtacted is 15 percent of what's left over".>>

AGI has absolutely nothing to do with it. It's income from self-employment and only income from self-employment that counts. AGI may be composed of wages from another job in which one is the employee, interest, capital gains, and dividends as well as a whole host of other income items. Thus, think "self-employed income," and banish any mention of AGI from the discussion.

Regards..Pixy
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