stupidest question of the season

[oceanlovin'ea]

Ok, I feel really stupid asking this question. But my head is totally clogged with allergy issues here in Florida. I have too many returns to finish by next week. People keep calling me...........

The limitation for a SEP-IRA contribution by the employer is 25% of wages up to $49,000.

So that means the contribution limit is $49,000 if they had wages high enough to make that much of a contribution. If wages were $100,000, the contribution could be $25,000.

Sorry. The fog in my brain is pushing all tax knowledge out of the way.

Thanks

Linda

[BHoffman]

Lamest answer of the season

A tasty link for you:

http://www.sepiracontributionlimits.com/

[ChEAr$]

Ok, I feel really stupid asking this question. But my head is totally clogged with allergy issues here in Florida. I have too many returns to finish by next week. People keep calling me...........

The limitation for a SEP-IRA contribution by the employer is 25% of wages up to $49,000.

So that means the contribution limit is $49,000 if they had wages high enough to make that much of a contribution. If wages were $100,000, the contribution could be $25,000.

Sorry. The fog in my brain is pushing all tax knowledge out of the way.

Thanks

Linda

Weelllll! Maybe it was a stockbroker who assured him he could use the $49,000
limit.
You reckon?

[BHoffman]

Stupider question

It's a contest....

New client comes in needing 3 years of returns - 07, 08, 09

Unemployed since 2007. Husband confessed to me that he does "side" work for cash. I told him I'll need the details and he should report that income along with the expenses.

Used to make lots and lots of money. Put lots and lots into IRAs and 401(k)s.

Living off early pension distributions, no exception.

Wife got very angry (not at me) about having to pay penalties, and said they didn't have enough money, economic crisis, no work out there, .....

Is there anything I'm missing in the penalty exceptions that might apply here???

I really wanna shine this client down the road.

Thanks

[FEDUKE404]

Simple answer

I would send him to Block or similar.

Their pockets are probably far deeper than yours.

"Unemployed" but "worked for cash" is a time bomb waiting to explode.

And that is without the issue of how truthful the guy is ever gonna be with you.........

As for the exceptions to 10% penalty - they are few and far between - doubt they would be applicable.

FE

[BHoffman]

I believe I will be taking your advice