SEP and Traditional IRA

[Deborah]

Hello
Is it possible to make maximum contributions to both a Traditional IRA and a SEP IRA for a self-employed person.
In reading these definitions, a SEP is treated as a Traditional IRA, but I find nothing that says specifically you cannot contribute the maximum to both.
Thanks.

[Bees Knees]

A SEP is considered a traditional IRA after the money is contributed into the account. Thus, for distributions and RMD rules, the SEP is treated just like a traditional IRA. But for contribution rules, the SEP is not yet a traditional IRA.

Therefore you can do the max contribution to both a SEP and a traditional IRA.

However, a SEP is considered a qualified retirement plan for purposes of the deductible IRA contribution rules. For example, a single taxpayer in 2007 will have a portion of the IRA contribution treated as a nondeductible contribution when the taxpayer is an active participant in a qualified retirement plan, and AGI is between $52,000 and $62,000.

A SEP contribution by a self employed taxpayer makes the taxpayer an active participant in an employer plan, thus limiting the deductible IRA contribution if AGI hits the phase-out range.

[veritas]

One important point

Do not contribute for your traditional IRA to the SEP IRA and take a deduction.

Keep them seperate.

If you don't you will get a letter.