Today TaxMama hears from Bill, in New Hampshire, who tells us, “I am employed with a work sponsored 401(k) plan to which I contribute the maximum PLUS the catch-up limit.
I am also self-employed with a SEP to which the maximum is contributed. Can the SEP also accept a catch-up contribution? I am over age 50. “
Well done. Keep this up and you’ll have a rich and satisfying retirement.
What may you contribute to your Self Employed Pension (SEP)?
There is no specific catch-up additional contribution for SEPs, just the total annual limits.
(note: Disregard the 2002 in the URL. This link does have the limits to at least 2007 for ALL plans.)
As long as your total contributions to both the 401(k) at work, and your SEP for your own business don’t exceed the maximum allowable contributions for a SEP, which are $44,000 (2006) $42,000 (2005), you should be fine. http://www.finance.cch.com/text/c40s10d280.asp
Go forth and save!
And remember, you’ll find answers to questions about retirement contributions and all kinds of tax issues, free. Where? Where else? At TaxMama.com[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips. Please click on the subscribe link and join us.]
- Ask TaxMama :: Where taxes are fun and answers are free
- Kelan Roy CPA :: the total annual limits.
- CCH :: Explanation of SEP Contribution Limits