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Posted by Victor Roberts on April 28, 2007, 4:44 pm
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gail@atwoodarchitects.com wrote:
> I have two business/sole proprietor. For one I file a
> Schedule C. It is profitable. The other is farming (I file
> Schedule F) which almost always has a loss. I combine the
> two incomes and file a SE which means that my SS taxes are
> reduced by the farming income (loss). I have a SEP
> associated with the Schedule C business and I put 20% of the
> profit each year into my SEP. I called the IRS three times
> and each time they said this was correct even tho it is not
> 20% of the total on the SE. Is this correct? And why
> can't I save 25% like most do on a SEP? Is there a better
> retirement Plan?
You are saving 25%. When you put 20% of the pre-SEP amount
into the SEP it means the SEP is then 25% of the net amount.
Start with $1000. Put $200 into a SEP. That leaves $800 for
you. $200 is 25% of $800.
--
Vic Roberts
Replace xxx with vdr in e-mail address.
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