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You have a couple of choices with your IC income. I'm assuming you generate 1099 income as an Independent. Depending on how much you report and how much you wish to save your choices will be either a SEP-IRA or a Single Person 401k.
Lets look at an example.

Under a SEP you can contribute up to the lesser of 25% of pay or $40,000. (Previous post noted 13% limit, this was increased as part of the Pension Reform Act passed in June 2001 with an effective date of Jan 01, 2002 known as EGTRRA) The 25% is reduced to 20% if you are unincorporated (Schedule C)but the $40,000 limit still holds.

Under a Single K you can do the same as a SEP IRA but you can also make "employee" contributions up to $11,000 this year. If you are 50 or older you can do an extra $1,000. Lets compare side by side
Assuming 100k in income.

SEP IRA Single K
25% of pay= $25,000 25% of pay = $25,000
+ $11,000 Employee contribution
+ $1,000 catch up if over 50
Total SEP $25,000 Total Single K $37,000

if you don't have the means to max out under a Single K open a SEP and contibute there because there is no need to file certain IRS paperwork that will be required under a SIngle k (IRS Form 5500EX once 100k is in the plan)
Hope that helps, if it confused please follow up with question


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