I need to know how much i can contribute to my SEP IRA and my ROTH IRA

Forum|Forum|11 months ago
April 14, 2025
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I've filed an extension but I need to know what my contribution limits (what's the maximum I can contribute) to my SEP IRA and ROTH IRA. I can see where that information is on Turbo Tax. I haven't previously made any contributions to SEP or ROTH for the 2024 tax year.

dmertz

Employee

To calculate the maximum permissible SEP contribution, mark the Maximize box for a SEP contribution in the self-employed retirement section of TurboTax. After that, you can enter the maximum annual Roth IRA contribution limit of $7,000 for 2024 ($8,000 if age 50 or over in 2024) and see if TurboTax indicates any of this as being an excess contribution. If TurboTax shows an excess contribution, go back an reduce the originally entered amount by the amount TurboTax indicated as being an excess contribution.

Filing an extension is irrelevant to making the the Roth IRA contribution. The deadline to make this contribution for 2024 is tomorrow, April 15, 2025.

ADAM74Author

Thank you! what's confusing is the wording - you have to hit "yes" even if you haven't contributed for 2024 then it'll take you through the flow.

As a follow up, TT tells me my MAX retirement contr. is (let's say) $10K. However, I don't see if this is max across my ROTH (I meet the annual income requirements to invest the full $7K) AND my SEP IRA, or if I have to split the $10K between the ROTH and the SEP.

Any advice on how to clarify this? I hit the maximize box for my SEP but there wasn't one for my ROTH.

My assumption is that TT is telling me I can only invest $10K TOTAL. I'd like to max out contributions for both retirement products to lower my tax burden.

Thanks!!

dmertz

Employee

In the self-employed retirement section, TurboTax is telling you the maximum permissible SEP contribution. TurboTax will separately tell you in the Roth IRA contribution section if you have entered an excess Roth IRA contribution. Nowhere does TurboTax explicitly tell you a combined maximum. However, your combined contributions to a traditional SEP-IRA and a Roth IRA are not permitted to exceed net earnings. Net earnings are net profit minus the deductible portion of self-employment taxes. If this is a limiting factor, you might want to adjust the split of your contributions between these two accounts. Your permissible Roth IRA contribution could also be limited based on your modified AGI for the purpose and your filing status.

I don't think that TurboTax anywhere tells you the maximum that you can contribute to a Roth IRA, it only tells you if the Roth IRA contribution that you have entered exceeds the maximum. Where TurboTax is actually identifying an amount as a maximum contribution I think that this must be in the self-employed retirement section.