SEP IRA question

[taxxcpa]

Can a self-employed person with no employees who has just set up a SEP IRA still make a 2008 contribution to the SEP IRA? He has already contributed $5000 to a traditional IRA--how would that affect it?

[tilt53]

I can't quote you a cite, but I played around in my software (ProSeries) and it allows both.

[Bucky]

he can make contribution to SEP up until October 15 if return is extended. Depending on his modified adjusted income and filing status the IRA might or might not be deductable.

[Burke]

Correct. The setting up and funding for 2008 of a SEP means he is covered by a qualified pension plan and the IRA deduction comes under those rules.

[taxxcpa]

Spousal IRA

His self-employment income was $ 116,200 so he could contribute a little over $ 20,000. It looks like he would not be able to contribute further to another IRA.....BUT does the phase-out also prevent his wife, who does not work, from contributing to a spousal IRA?

[BP.]

does the phase-out also prevent his wife, who does not work, from contributing to a spousal IRA?

TTB p. 13-11 --- MAGI phase out range for deducting spousal IRA is $159,000-$169,000.

[taxxcpa]

Thanks

TTB p. 13-11 --- MAGI phase out range for deducting spousal IRA is $159,000-$169,000.

Thanks for that TTB reference.
I've been looking all over the Tax book and didn't see that. All I was looking at was the $ 105000 phase-out for an active participant.