Guest AFRICA6796 Posted March 15, 2001 Report Share Posted March 15, 2001 I am showing a loss on my schedule C income ( line 12 of my 1040). However, for my overall 1040- I have earnings. Can I make a SEP IRA contribution ? In other words, is a sole proprietor required to have a net profit in order to be eligible to make a contribution to a SEP IRA Link to comment Share on other sites More sharing options...
Michael Devault Posted March 15, 2001 Report Share Posted March 15, 2001 My interpretation of the discussion in IRS Pub 590 is that, if you're self employed, you must have positive earnings from self employment in order to contribute to a SEP. The limit on contributions is 15% of compensation. For the self employed, compensation is defined as net earnings from self employment. If net earnings is zero, so is compensation. Thus, the maximum contribution is 15% of zero. Link to comment Share on other sites More sharing options...
Guest AFRICA6796 Posted March 15, 2001 Report Share Posted March 15, 2001 Thanks , That's what I thought. Would believe that my CPA filed my taxes, showed a loss and still included a SEP IRA contribution? He insisted that my understanding of the regs is incorrect- and to complicate matters I e-filed. Good thing I double checked-at least I can file an amended return Thanks again Link to comment Share on other sites More sharing options...
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