How much can be contributed to a SEP IRA?
A SEP allows a self-employed person to contribute more to a retirement account than the current limits on 401(k) and IRA. For a sole-proprietor, the maximum contribution is 20% of net operating income, up to $46,000. If a small business owner allocates a specific amount of cash flow to salaries, the maximum SEP contribution is 25% of compensation, up to $46,000. There is no upper age limit on participation in a SEP.
A SEP allows a self-employed person to contribute more to a retirement account than the current limits on 401(k) and IRA. For a sole-proprietor, the maximum contribution is 20% of net operating income, up to $49,000. If a small business owner allocates a specific amount of cash flow to salaries, the maximum SEP contribution is 25% of compensation, up to $49,000. There is no upper age limit on participation in a SEP.
