Roth IRAs and SEP IRAs

[Guest patdools]

My wife has a Roth IRA that was fully funded ($2,000) in tax year 2001. She is also self-employed and deposited another $600 into a SEP-IRA she had set up for tax year 2001. Our accountant said that you can only fund ONE IRA in a given year-- but does this apply when you have a SEP??

:confused:

[Appleby]

The accountant need to re-educate him/herself on the IRA rules.

You may fund both a traditional and Roth IRA in the same year, as long as the individual contribution limit is not exceeded (i.e. $2,000 for year 2001 or $3,000 for 2002).

Regarding the SEP IRA, the Roth IRA contribution does not affect the SEP contribution or vice-versa. Providing the individual has earned income, it is permissible.