| Step IRA - Maximum Contribution = $51k or 25% |
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Irish_Immigrant
New Member
Cash: $ 0.70
Posts: 3
Joined: 24 Feb 2013
Location: Pittsburgh
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| Step IRA - Maximum Contribution = $51k or 25% |
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Hi,
I just started a small business and have opened a Vangaurd Step IRA.
I can contribute $51k or 25% - does this mean I can contribute $51k if I earn, for example, $80k?
Thanks!
Irish Immigrant
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Tue Mar 05, 2013 5:43 pm |
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alholden
First Time Poster
Cash: $ 0.20
Posts: 1
Joined: 19 Mar 2013
Location: Austin
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| SEP Contribution Limits |
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So I assume you meant an SEP IRA? The 2012 tax year contribution limit for SEP IRAs is 25% of an employee’s salary or $50,000, whichever is smaller.
For the 2013 tax year, the IRS raised the limits to $51,000 or 25% of an employee's salary, whichever is smaller.
edited to remove link
I'm also assuming that you're self-employed or own a small business, as this is the most common scenario with an SEP IRA. If you're an employee (less common) then different limits apply.
So if your income is $80,000, then your maximum contribution is 25%, or $20,000. Does that make sense?
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Tue Mar 19, 2013 11:23 pm |
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