Sep/ira

[Luckeym]

I have a client who is a realtor. She has a SEP-IRA. If she decides not to fund her SEP-IRA can she contribute to a Traditional IRA instead. She contributed in 2008 for 2007 SEP-IRA but with incomes levels drastically down she would be better off contributing to the Traditional limit of $6,000 (over 50) in 2008.
Her SEP-IRA is with a credit Union and they do not report which year the SEP -IRA is for, only the year in which the contribution was made. She would like to go ahead and make the 2008 Traditional now but will this be a flag if both a SEP-IRA and a Traditional IRA are made in the same year even though they are for different tax years? Thank you.

[Anarchrist]

She can contribute to both and deduct both if the income limitations don't kick in. She can make a regular IRA contribution instead of a SEP contribution though a SEP is an IRA so it is basically the same thing, just listed on a different line on the tax return. Since a SEP is an IRA, she can make her regular IRA contribution into her SEP if she doesn't have or doesn't want another account.

[Nashville]

Credit Union

Lucky, check again with the credit union. If they do not report prior year contributions they are not complying with requirements to administer IRAs and SEPs. Yore client should not have to make a "blind" contribution just because they don't choose to report properly.