Contribution Limits
You cannot contribute directly to a SEP-IRA. However, your employer can contribute on your behalf. If you are self-employed, then this article will help you figure out the maximum you can contribute for yourself. The maximum amount you can contribute to a SEP-IRA depends only on your compensation. These are the correct SEP-IRA contribution limits for 2009 and 2010. Contributions to other qualified retirement plans (401(k), 403(b), SIMPLE, or SEP) will count toward this limit.
- Up to 25% of your compensation, but not more than $49,000 total
Deadline for Contributions
The deadline for contributions to SEP-IRAs is the same as the tax deadline for your employer. If you are self-employed, the deadline is April 15th. Otherwise, the deadline is generally March 15th unless you are on a fiscal year tax deadline. Any tax return extensions you file will also extend the deadline for SEP-IRA contributions.
Tax Deduction for Contributions
SEP-IRA contributions are deductible by your employer (or if you’re self-employed, by your business or on Schedule C). You receive no deduction on your tax return for contributions made on your behalf to a SEP-IRA. These contributions are not eligible for the Retirement Savings Contribution Credit.
Paul Williams is a fee-only financial planner in Lancaster, PA. He has a passion for teaching others about personal finance - especially from a Christian perspective. If you'd like to learn about his financial planning and tax preparation services, click here. If you enjoyed this article, you might also be interested in:
- 401(k) Plan Contribution Limits
- SIMPLE IRA Contribution Limits
- 457 Plan Contribution Limits
- 403(b) Plan Contribution Limits
- Traditional IRA Contribution Limits
