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one participant sep. max annual addition?

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In most cases, it will be the lesser of 25% of comp or $44,000. Can't remember if elective deferrals reduce comp in a SEP; I think they do. If it's a SARSEP (one that existed prior to 1997), then the limit is potentially increased for catch up contributions.

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  • 2 weeks later...

The most that can be deducted AND excluded from the participant's income cannot exceed 25% of taxable compensation (excluding elective other than catch-up deferrals) or $44,000 (plus catch-up contributions of up to $5,000) for 2006. The deductible limit could be higher (because elective deferrals do not reduce compensation upon which the 25% deduction limit is computed). Hope this helps.

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