How to calculate SEP IRA contributions for an S Corporation

by | Aug 9, 2022 | SEP IRA | 10 comments

How to calculate SEP IRA contributions for an S Corporation




How to calculate SEP IRA contributions for an S Corporation. In this video I’m focusing on the SEP IRA for the s corp small business owner.

The SEP IRA contribution calculation for small business owners who own an s corp is different than a self employed schedule C filer.

The calculation is based on the income, rate and limit. Employees do not contribute to a SEP IRA.

0:00 | Introduction
0:50 | 6 SEP IRA Tips
0:56 | 6. No Roth IRA
1:23 | 5. SEP IRA Investment Options
1:51 | SEP IRA Retirement Age
2:11 | SEP IRA Employer Funded Only
2:30 | SEP IRA Filing Deadline
3:03 | SEP IRA Eligibility
3:54 | SEP IRA Contribution Limit
4:08 | SEP IRA Income Limit
7:05 | S Corp W2 Vs Distributions

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TRAVIS T SICKLE, CFP®, EA®, AAMS®, CRPC®, RICP®
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See also  Is it possible to perform a Backdoor Roth conversion with a SEP IRA account?

Sickle Hunter Financial Advisors
1646 W Snow Avenue
Suite 144
Tampa, FL 33606

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10 Comments

  1. Sweet Land  Lady

    Do you have to open a new sep Ira account under the s corp name in order to contribute or can you just contribute to your sep Ira under your personal name funded by the S corp? Thanks I asked cause I have just changed my business from sole proprietorship to S corporate

  2. petlover

    Great Article Travis… Consider this scenario: S-Corp, sole owner, 200K earning. Don't pay W2, straight K1. Can I contribute 50K to SEP such that net I receive is 150K. How do I calculate if I am not paying myself on W2?

  3. The Nieves Law Firm, APC

    Does the net income of the S-Corp count towards the earned income calculation or is it strictly W-2 income?

  4. Scott Pugh

    Very well done! Thank you.

  5. dont tread

    Do you have a single SEP-IRA's or multiple SEP-IRA's if multiple contributors?

    1. Would my employed (W2) and self employed (sole prop) SEP-IRA contributions go in to a single SEP-IRA, or would I be required to have two SEP-IRAs?

    2. Is there any problems with taking a SEP contribution for my sole prop income and S-Corp W2 income?

    3. Would I keep two Form 5305-SEP's for my records?

    My Sole prop income was in Q1 only. This sole prop then became a SM-LLC (S-corp election) and was my income for the rest of the year.

  6. Roman

    Do you have to set up an all-new Sep-IRA account for the S-Corp shareholder or can the S-Corp fund an existing Sep-IRA account?

  7. Elda Charm

    Contribution is using W2 box 1 (wages, tips, and other compensation) amount * max 25% = Sep IRA contribution?
    Is this correct?

  8. cindy chang

    Great explanation! Question: Is there a contribution limitation for SEP IRA if an independent contractor (w/1099 form), fill joint tax return with his/her spouse? say, household AGI for both is over $230K of traditional IRA limit?

  9. Janice Nunn

    Link to SE SEP info?

  10. Snowfirel

    Thank you Travis

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