SEP IRA Explained: HUGE Tax Savings for Self-Employed Individuals!

by | Jul 31, 2022 | SEP IRA | 23 comments

SEP IRA Explained: HUGE Tax Savings for Self-Employed Individuals!




The SEP IRA is a simple way to invest into your retirement while reaping HUGE tax benefits.

The SEP IRA allows business owners to deduct up to $58,000 and put that money towards retirement.

This is thousands of dollars more than the $6,000 contribution limit that a standard traditional or Roth IRA account allows you to deduct.

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So if you are Self-employed, earning income, and NOT taking advantage of the SEP or Solo 401K, get ready to cut your tax liability and save more money for retirement.

Outline:

Intro: (0:00)
What is a SEP IRA: (1:15)
Benefits of SEP IRA: (2:17)
How a SEP IRA Works: (3:31)
Pros & Cons of SEP IRA: (5:30)

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23 Comments

  1. MarcotheMillionaire

    ok so you need to make around 294,000 to contribute 58k???

  2. Rob D.

    at 2:36 you say, you can contribute up to 20%. However from what I’m reading from other sources you can contribute up to 25% or $58,000 ($61,000 for 2022 ever is lower). can you clarify? Thanks for posting!

  3. Puneet Jajoo JR

    Big ups to everyone working effortlessly trying to earn a living while building wealth. I’m 50 and my wife 44 we are both retired with over $3 million in net worth and no debts. Currently living smart and frugal with our money. Saving and investing lifestyle made it possible for us this early even till now we earn monthly through passive income.
    Thanks to fire movement.

  4. oscar madinabeitia

    Could a SEP IRA be rolled over to a regular IRA if for example you decide to go back being an employee instead of being self employed?

  5. Nandi B

    Hi. Thank you. Can those functioning as Sole Proprietors also go this route?

  6. Anthony Broskey

    Are the limits based on the employee income?

  7. Jacob Miranda

    Thanks for a great video. I have a question. I am a freelance musician (small business account/EIN) with extra $ in my bank savings. I’m trying to put the $ into more investment strategies. I currently have a Roth, and it is maxed out. Should I have a SEP as well ? To dump extra cash in… My income is less than $100k/ year .The more than 100k in savings is money that has just built up over my life of saving. Hope to hear back.

  8. gojenny123

    Excellent thank you so much. I know this may sound like a little thing but it is huge for me…In that I loved how you had the words displayed on the screen regarding what you were saying. It helped me so much to process what you were saying. Thank you again

  9. C R

    LYFE, I am still not understanding what happens with the money sitting in the account, is it earning interest or what? ~~ I am an independent contractor, so how often can I contribute to my account? this is August 2021 so do I have until April 2022 to contribute? and where does one start? the IRS 5305-sep? _ do I need a CPA to do this?

  10. J Patt

    Can day traders open up a SEP? I keep hearing you say "earned income" and I believe capital gains would be a disqualification?

  11. Mike O'Donnell

    If I sell a stock in my SEP, is that a taxable event? For example, I sell stock “A” and make “X” profit, then reinvest in another stock within the SEP?

  12. michael muvirimi

    Thank you for this info, your videos are always precise and straight to the point, appreciate this!

  13. Steel&Plastic —

    You can’t deduct Roth contributions.

  14. Ryan Tanaka

    Fantastic. Can't wait for your Solo 401K video!

  15. M E-Belony

    Keep up the great work. Love these videos.

  16. Kamia Que

    Hi, thank you for the information. Quick question, would I be able to set up a SEP IRA with an ITIN if I don't have a SSN

  17. David Baker

    I was thinking about starting a SEP-IRA, but I already contributed to my Roth-IRA for 2021. Would I still be able to do that?

  18. Glendine Evans

    As always… another great video! I love you all!!

  19. The Standberrys

    This is huge tax savings, thanks for explanation

  20. K Lewis

    Thank you for this informative video.

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