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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75339  
Subject: Re: I have an IRA, what next? Date: 9/26/1998 11:01 AM
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Xxdusty writes:

I have an existing traditional IRA (a small part of which I will convert to a Roth this year) and no retirement plan at my full time job. I often do freelance work, 1099misc, that amounts to between $2000-$5000 a year.
Am I eligible to contribute to Keoghs/SEPs/Simple/etc.
while still adding $2000 a year to my IRA/Roth???

I've looked at the retirement plans page on this site, but can't seem to deduce whether the SEP/Simple would be included in "the total yearly $2000 contribution to all IRAs".

I know I can put money in taxable account, but wanted to see if I could sock away a little extra a year either tax deferred or tax deductible.


Yes, your 1099 income makes you eligible for a Keogh, SEP or SIMPLE for part of that income. You should get and read IRS Publication 560, Retirement Plans of Small Business, which you can download at http://www.irs.ustreas.gov/prod/forms_pubs/index.html . You can also read a brief description of these plans in my Foolish Retirement Plan Primer at: http://www.fool.com/retirement .

401k plans and Keoghs/SEPs/SIMPLEs count only in determining whether an annual IRA contribution to a traditional IRA can be deducted for income tax purposes. If you meet AGI limits for your filing status, then you may contribute up to $2K per year to a Roth IRA. Further, you may always make a nondeductible contribution to a traditional IRA regardless of your AGI. A deduction for a traditional IRA when using a Keogh/SEP/SIMPLE is subject to phaseout based on the AGI for your filing status.

Regards….Pixy

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