Comments on: Trying To Decrease My Taxes, I Have Opened A SEP-IRA

By: Mary

Mary — Sat, 22 Nov 2008 18:12:21 +0000

Please note that the limits stated above are for those under 50. The limit in 2008 for those 50 or older is $51000. There will be minimal paperwork required until you hit $250,000 in assets. Fidelity’s SE401K is easy to open up but you will need to get a federal id first. Fidelity will tell you how. Be sure to open your plan by 12/31, I previously had a SEP plan and after researching the newer SE401K a couple years ago, found that the SE401K is a much better plan if you want to sock away the most money during the year.

By: SEO Links

SEO Links — Sun, 16 Nov 2008 00:27:25 +0000

Interesting article on SE401K…………great post

By: FIRE Finance

FIRE Finance — Tue, 04 Mar 2008 00:43:01 +0000

Fantastic post. We cited it in our Sunday Review as one of our favorites.
Keep up the excellent blogging.
Cheers,
FIRE Finance

By: Jodie Nelson

Jodie Nelson — Mon, 25 Feb 2008 23:43:15 +0000

One more item…the SE401K needs to be set up before year-end so you can’t use it for 2007. It is a good way to put the money away though. I haven’t heard what the fees for these are though…In my experience the traditional 401k is pretty expensive to set up, I don’t have any info on the SE401k. Thanks for the blog post from Foobarista, it had good info in it…

By: Jodie Nelson

Jodie Nelson — Mon, 25 Feb 2008 23:36:59 +0000

Put on your tax form the amount you WILL put into the SEP. I guess you need to know now what amount you will put in…but you are a financial genius, right?!

By: Foobarista

Foobarista — Mon, 25 Feb 2008 02:58:04 +0000

If you’re a sole proprietor, a SE401K is better than a SEP-IRA; you can put your first $15,500 into a SE401K, but a SEP is a straight percentage up to the maximums.

If you are trying to shovel the maximum amount into tax-deferred accounts, a SE401K is better.

SE401Ks are _NOT_ employer 401Ks – they are pretty much identical to SE401Ks in terms of paperwork, although there are fewer brokerages that have them. (The main one is Fidelity).

My wife has had a SE401K for several years and has put, on average, about 40% of the profits from her business into it each year.

Here’s my blog post on SE401Ks versus SEP-IRAs. It’s a bit old, so the numbers are slightly out of date, but still basically valid.

By: Vectorpedia (Rick)

Vectorpedia (Rick) — Sun, 24 Feb 2008 14:56:28 +0000

Thanks for the very informative information on SEP IRA’s……….I have heard of them before but didn’t know the details until reading this article.

By: NCN

NCN — Sun, 24 Feb 2008 01:32:10 +0000

Jodie,
Thanks for the info! If I understand it correctly, I can file for an extension, but I must PAY any amount that I owe by April 15th, correct? Now, if I wait until October to file, do I just put on my tax form that I EXPECT to fund the SEP by then… and thus reduce my taxes? Do you see what I’m asking? If I can’t make the contributions by April, can I just put the amount that I plan to contribute… and then contribute before I actually file?
NCN

By: Jodie Nelson

Jodie Nelson — Sun, 24 Feb 2008 00:41:13 +0000

Hi:

I am a CPA and also use a SEP…you know that rule said you can contribute UNTIL April 15 OR the extended due date of you return….You can request an automatic extension until Oct 15th and have until that time to make your contribution. However, you don’t have to wait to file your taxes until you have funded your SEP….just fyi…