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Andrew Schwartz CPA
Dec 2, 2007 - 10:36AM
Re: Self-employment & retirement plan options

Assuming your maxing out your salary deferrals through work, then the only practical option is to contribute to a SEP IRA. With a SEP, you can contribute up to 20% of your net self-employment income into an IRA account. The money contributed reduces your taxable income and grows tax deferred.

Is it worth it to contribute to a SEP if you only have a thousand or two of self-employment income? That's up to you.

I think I would first do what I could to take expenses against that self-employment income to bring the profit from this activity to zero.

I hope this helps you out.

Zip Code: 01801

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