SEP IRA Contribution Calculator
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Guide
SEP IRA Contribution Guide
Calculate allowable SEP IRA contributions for self-employed individuals and corporate officers based on IRS compensation caps.
Formula
Self-Employed Cap = Min(Statutory Limit, (Net Earnings - 1/2 SE Tax) * 20%)
W-2 Officer Cap = Min(Statutory Limit, Min(W-2 Wages, $360,000) * 25%)Frequently Asked Questions
- Why do self-employed individuals use a 20% rate instead of 25%?
- IRS Publication 560 requires reducing net earnings by the self-employment tax deduction, creating an effective 20% contribution cap.
- Can I contribute to both a SEP IRA and a Roth IRA?
- Yes. Contributing to an employer SEP IRA does not prevent you from making personal contributions to an individual Roth IRA if within income limits.