SEP-IRA Question

[cgabriel]

If I have two different sole proprietorship businesses, and I file two Schedule Cs, and on one I have, say, a profit of $70,000, and on the other a loss of $5,000, what is the most I can set aside in a SEP-IRA? Is it 25% of $70,000, or 25% of $65,000? Thanks.

[Matt Sova]

Neither

The answer is none of the above.

The max percentage for a sole prop is 20% and it is of the business income on the Schedule C less 1/2 of the SE tax.

70000 - 4592 = 65,408 x 20% = 13,082 max sep contribution.

[cgabriel]

Thank you very much for the info.

[Kram BergGold]

Also

SEP's are business specific. So if the SEP was originally set up fo the losing business you would have to open a new one for the business with 70k of income