Hi,

I'm a physician who just got out of residency earlier this year. I have contributing to an ERISA qualified plan (457) and am continuing to do so in my new job (same plan) up to the max ($13000). My wife is a 2nd year resident is is also contributing to a 403b plan (maxed out as well). We both are also planning to max out our Roths this year as our MAGI will probably be less than $150k. I did some moonlighting on the side as well this year and earned a relatively small amount of income (around $6k). My question is .... can I open a SEP IRA and contribute 25% of the moonlighting income to that IRA? or does contributing to either of the ERISA qual plans/Roth IRAs preclude me from doing so? My 2nd question is ... if I am eligible, then would I be able to contribute 20% or 25% ....(Note: the "moonlighting" was during residency and SS/Medicare/Federal/State were withheld). Thanks for any replies - Rav

Zip Code: rav77us@yahoo.com

Generally, if you moonlight, you can sock away up to 20% of your net moonlighting income into a SEP - even if you are already maxing out your employer sponsored 403(b) plan and 457 plans, and your IRAs.

There is a catch. You can only contribute to a SEP based on your net independent contractor income. So if you're being compensated as an employee, you can't contribute to a SEP IRA on that income.

It seems like you're doing a great job saving for your retirement. Keep up the good work!

Zip Code: cpa@mdtaxes.com