00:00 Intro SEP IRA + Roth IRA 00:55 Who should consider the SEP IRA? 01:26 Who should consider the Roth IRA? 2:00 SEP IRA Contribution and Income Limits 2:44 Roth IRA Contribution and Income Limits 5:05 SEP IRA contribution calculation 6:29 S-Corporations and the SEP IRA 7:33 Backdoor Roth IRA contributions 8:28 IRS Publication 560 8:56 SEP IRA Contribution Rate Sheet 10:00 IRS Publication 590-a 10:20 MAGI for Roth IRA worksheet 10:55 Publication 590-b 11:19 Retirement Plan Rollover Chart 11:55 Issue #1 14:23 Issue #2 14:32 Issue #3 17:00 Issue #4
That was also my question, i maxed my roth to 7000 this year, and I have some money on my SEP. i fear that having over the 7000 on both my roth and sep exceeds the contribution limits.
@@TravisSickle thanks a lot my friend. Im new to this world and your video was really enlightening. Thanks for taking the time to respond. I already subscribed to keep stealing your knowledge. Please accept my gratitude.
If you have to do a backdoor roth and can do SEP contributions, couldn’t you fund the sep and do a conversion in December to zero out the SEP balance every year so you can do a backdoor roth in January and not have to worry about the pro-rata rule. If you convert everything once a year it should have very little tax ramifications.
Yes, that's possible to avoid pro rata and just convert every last dollar every year. I don't find that's always the best route but if it works for you then keep on going.
Most investment firms can set them up but they do have some differences. One of those is the ability to do the mega backdoor Roth. Our company can set it up as well.
So, as a self-employed pastor and accountant I can contribute the max contribution both to my SEP and my Roth ira? Simple math=20% to SEP and 8,000 (2024) to the Roth. I am 60 years old.
Thanks Travis! For the SEP IRA if a business only has 1099 employees must the business find a SEP IRA for the employees or can they simply fund the business owner SEP?
@@TravisSickle little confused by your statement..aren’t 1099 employees able to open SEP IRAs as a hog worker??…unless I’m misunderstanding your statement? 1099 gig workers using Schedule C eligible for SEP IRA
I just started an S corp this year and I opened a sep ira (havent funded it yet) but I do have a maxed ROTH Ira. I want to continue maxing my roth ira, and put whatever extra i have into a sep ira. I have 2 questions... 1.) I think you said K1 is not considered net income. If that's the case, should I pay myself a bit more in W2 and less in distribution so that I can put more into the sep ira? (because of net income) 2.) My girlfriend is technically employed by my business. But shes been employed as of this year under my s corp. Is she considered a qualified employee? I don't want to contribute to her IRA. Does this mean I cant have a sep ira?
@@hugoenriquez9318 right. K1 is not considered for retirement plan contributions. The solo 401k would be better in many situations for max Roth contributions. You mentioned she technically works for your company. Do you mean she doesn’t do a whole lot and may be just helping out here or there? That may change what I would recommend to max your retirement and lower taxes. A solo wouldn’t work if she’s on the payroll. Sep would likely require contributions but possibly not for her this year. A few more facts would help figure that out.
@TravisSickle she works and on payroll so she gets a W2. I max the roth and was looking to add another $12,000 a year into the SEP. I've been running in circles with this. I was just putting that $12k into my brokerage account but I figured I might as well get a tax deduction. So I opened a SEP. But I haven't funded it yet. Vanguard person said I can have both roth and sep. And the sep contribution I need to choose employer and not employee.
I may have missed it but it sounds like you’re saying if you’re below the income limits you can max out both Sep and a Roth in the same year. Is that right?
00:00 Intro SEP IRA + Roth IRA
00:55 Who should consider the SEP IRA?
01:26 Who should consider the Roth IRA?
2:00 SEP IRA Contribution and Income Limits
2:44 Roth IRA Contribution and Income Limits
5:05 SEP IRA contribution calculation
6:29 S-Corporations and the SEP IRA
7:33 Backdoor Roth IRA contributions
8:28 IRS Publication 560
8:56 SEP IRA Contribution Rate Sheet
10:00 IRS Publication 590-a
10:20 MAGI for Roth IRA worksheet
10:55 Publication 590-b
11:19 Retirement Plan Rollover Chart
11:55 Issue #1
14:23 Issue #2
14:32 Issue #3
17:00 Issue #4
Yes, Travis is very helpful, Have a Happy Thanksgiving everyone.
Thanks for sharing. May GOD bless you and your family
Hey Travis!! Happy holidays buddy
Thanks! You too!!!
So which would be better for the S Corp? It sounds like the Roth would save more. Thank you for making video
How about a self employed with no employees? Can he/she contribute to both SEP and Roth to the max limit??
That was also my question, i maxed my roth to 7000 this year, and I have some money on my SEP. i fear that having over the 7000 on both my roth and sep exceeds the contribution limits.
@paneca05 sep IRA is employer funded and does not reduce your Roth IRA contributions.
@@TravisSickle thanks a lot my friend. Im new to this world and your video was really enlightening. Thanks for taking the time to respond. I already subscribed to keep stealing your knowledge. Please accept my gratitude.
What’s better to invest in- a SEP IRA or a brokerage account? Thanks so much!
Great information
T, I'm very confused with all the Algebra !!
If you have to do a backdoor roth and can do SEP contributions, couldn’t you fund the sep and do a conversion in December to zero out the SEP balance every year so you can do a backdoor roth in January and not have to worry about the pro-rata rule. If you convert everything once a year it should have very little tax ramifications.
Yes, that's possible to avoid pro rata and just convert every last dollar every year. I don't find that's always the best route but if it works for you then keep on going.
Where does one get the solo 401k?
Most investment firms can set them up but they do have some differences. One of those is the ability to do the mega backdoor Roth. Our company can set it up as well.
@@TravisSickle Great video. Once you max out the roth ira as a small biz, is the next step a sepira?
So, as a self-employed pastor and accountant I can contribute the max contribution both to my SEP and my Roth ira? Simple math=20% to SEP and 8,000 (2024) to the Roth. I am 60 years old.
right. assuming income limits etc.
Thanks Travis! For the SEP IRA if a business only has 1099 employees must the business find a SEP IRA for the employees or can they simply fund the business owner SEP?
1099 are not included in any plan.
@@TravisSickle little confused by your statement..aren’t 1099 employees able to open SEP IRAs as a hog worker??…unless I’m misunderstanding your statement? 1099 gig workers using Schedule C eligible for SEP IRA
I just started an S corp this year and I opened a sep ira (havent funded it yet) but I do have a maxed ROTH Ira. I want to continue maxing my roth ira, and put whatever extra i have into a sep ira. I have 2 questions...
1.) I think you said K1 is not considered net income. If that's the case, should I pay myself a bit more in W2 and less in distribution so that I can put more into the sep ira? (because of net income)
2.) My girlfriend is technically employed by my business. But shes been employed as of this year under my s corp. Is she considered a qualified employee? I don't want to contribute to her IRA. Does this mean I cant have a sep ira?
@@hugoenriquez9318 right. K1 is not considered for retirement plan contributions. The solo 401k would be better in many situations for max Roth contributions. You mentioned she technically works for your company. Do you mean she doesn’t do a whole lot and may be just helping out here or there? That may change what I would recommend to max your retirement and lower taxes. A solo wouldn’t work if she’s on the payroll. Sep would likely require contributions but possibly not for her this year. A few more facts would help figure that out.
@TravisSickle she works and on payroll so she gets a W2. I max the roth and was looking to add another $12,000 a year into the SEP. I've been running in circles with this. I was just putting that $12k into my brokerage account but I figured I might as well get a tax deduction. So I opened a SEP. But I haven't funded it yet. Vanguard person said I can have both roth and sep. And the sep contribution I need to choose employer and not employee.
i am a s corp with 2 other employess 1 of which is full time, they are both w2 same as me. If I contribute to the SEP do i only contribute to myself?
You MUST contribute the same percentage to ALL eligible employees. NOT the same amount but the same percentage of w2 income.
What if I have S corp but I don’t pay myself as w2?
based on net profit.
I may have missed it but it sounds like you’re saying if you’re below the income limits you can max out both Sep and a Roth in the same year. Is that right?
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