0

I am trying to determine if I can establish and contribute to a SEP IRA. Here are what I think to be the relevant details and questions.

  • I receive a W-2 from my day job employer
  • I have side income that involves
    • 1099-MISC income sometimes
    • ad revenue from a website (1099-NEC)
    • k1 pass-through income from a partnership
    • cash income from small hobby projects like teaching lessons or hosting small events

Do any of the preceding income sources qualify for contributions to a SEP IRA?

0

1 Answer 1

1

I receive a W-2 from my day job employer

Ineligible for a SEP IRA (even if your employer doesn't offer a retirement plan).

I have side income

I'm answering under the assumption that you're either a sole proprietor or have established a single-member LLC. If you have a different business structure, the following won't apply.

1099-MISC income sometimes

If this income is considered self-employment income on Schedule C, yes.

Ad revenue from a website (1099-NEC)

If this income is considered self-employment income on Schedule C, yes.

k1 pass-through income from a partnership

Ineligible, unless this income is considered self-employment income and subject to self-employment tax.

cash income from small hobby projects like teaching lessons or hosting small events

If this income is considered self-employment income on Schedule C, yes.

Note that if you have eligible employees, you must also contribute to their SEP IRAs based on their compensation.

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .