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Subject:  Re: SEP/401(k) Question Date:  1/23/2008  12:09 AM
Author:  irasmilo Number:  97971 of 132659

I searched to see if this has been answered before. I didn't see it in the search results.

The scenario is this: Employee with 401(k) earns a salary high enough that his personal IRA contribution deduction is almost entirely phased out. In addition to his fulltime job, he's starting his own business part-time.

Can he deduct SEP-IRA contributions strictly according to his SE income? Or do the income limits which restrict deductibility of his personal IRA contributions also restrict any SEP-IRA contributions he may make as a sole proprietor?

The employER-side SEP-IRA contribution is unaffected by anything other than his SE income.

Also, will a SEP-IRA contribution affect the amount he can contribute to his personal Roth IRA?

The employEE-side IRA contributions (traditional and/or Roth) are calculated and limited independently of the employER-side SEP-IRA contribution.

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