SEP IRA Explained: HUGE Tax Savings for Self-Employed Individuals!
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- Опубликовано: 3 авг 2024
- The SEP IRA is a simple way to invest into your retirement while reaping HUGE tax benefits.
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The SEP IRA allows business owners to deduct up to $58,000 and put that money towards retirement.
This is thousands of dollars more than the $6,000 contribution limit that a standard traditional or Roth IRA account allows you to deduct.
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So if you are Self-employed, earning income, and NOT taking advantage of the SEP or Solo 401K, get ready to cut your tax liability and save more money for retirement.
Outline:
Intro: (0:00)
What is a SEP IRA: (1:15)
Benefits of SEP IRA: (2:17)
How a SEP IRA Works: (3:31)
Pros & Cons of SEP IRA: (5:30)
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Watch next: The BEST Self Employed Retirement Plans to Reduce Your Taxes ruclips.net/video/4PHRLrGIm6k/видео.html
Thank you very informative in details!
Thank you so much for explaining this so simply.
Very helpful, Thank you
Nice ☝🏾
Excellent.
Hello. I am a slow prop. Is the 20% based on gross or adjusted gross income?
Great video, Question.
Can you rollover this Set-Ira into a Roth Ira or Selfdirected Roth Ira? is so, how often can you do it?. Here is why my question, I think is better to be moving money every year to a Roth Ira because it will grow for longer time and tax free instead of living it in this Set-Ira and differ more volume of taxes. Thanks
I would love to know the same thing.
Did you find out any more info on this?
My question is if you have dividend income that goes to your investment account aren’t you taxed? I cannot do dividend drips with my broker
i like your videos, you give dave chapelle vibes lol
How would this work with an s corp?. would I contribute to sep Ira directly from llc as employer?
I have a SEP Roth , Your saying 10k is the maximum to contribute?
Could you kindly explain: If you eventually have to pay taxes on SEP (when you retire), how are you saving/profiting from contribution? Are you not just delaying the taxes you'll have to pay anyway? Thx.
Yes. As with all deferred income programs (401k, traditional IRA, etc), all you are doing is delaying taxes. If your tax rate is the same when you earn the money and when you withdraw it in retirement, you didn’t save anything. The goal would be to pay the taxes when your marginal tax rate is lower. If you have a modest income but are saving from an early age and your investments will grow to a lot by retirement, you might be better off paying the taxes now (via a Roth IRA). If you have a large income and are saving little, a 401k or traditional IRA or SEP IRA is better.
It’s also possible that SEP or a Solo 401k could save you from paying a small amount of FICA/social security taxes, which is quite a lot of money. Especially for self employed people.
Fantastic. Can't wait for your Solo 401K video!
Thanks Ryan!
What if a person is a full owner of a S Corp who receives W-2 income and K-1 income?
Excellent thank you so much. I know this may sound like a little thing but it is huge for me...In that I loved how you had the words displayed on the screen regarding what you were saying. It helped me so much to process what you were saying. Thank you again
Glad it was helpful! Thanks for watching.
Thanks man 👊
Gem
Hey bro
Can I get the tax benefits for previous year if I invest after the new year? I was paid out for 2023, haven't filed taxes yet and would like to set up a SEP through my business. Can this count towards my 2023 wages?
You can still contribute to 2023 year right now
Just make sure you add it to your 2023 contributions
My wife is an independent contractor. We are married filing jointly. I understand she can contribute as much as 25% of her net earnings to a SEP-IRA in her name. Is this my wife's net earnings only or is it both our earnings combined because we are filing jointly? I couldn't find that on any of the info docs.
Good question. We are in the same situation looking for answers
Is it 20% of my income from my business or 20% of my income (I have a w2 9-5)?
Is for 1099 not for w2
Maybe I missed it, but it would be helpful to explain this is tax deferred: will need to pay tax on it eventually. A CON in my opinion over Roth IRA.
Good stuff man.
It’s “conTRIBute”
Are the limits based on the employee income?
I understand that you contribute the same amount per employee or % of their income. Is it true, there is no minimum on this though and doesn't' directly affect how much the employer invests in the SEP IRA?
So what happens if you are the only
Employee and then gain an employee how does this change sep Ira?
Hi. Thank you. Can those functioning as Sole Proprietors also go this route?
yes, I have a SEP IRA as a sole proprietor
As always... another great video! I love you all!!
Yay! Thank you! Are you subscribed?
@@LYFEAccounting Absolutely!
What is the point of this if end of day you can buy mutual funds directly and hold. Then only pay taxed on capital gains when you sell?
If you have employees then it's a benefit for them. Ppl who work for others don't always manage money well
If you buy a mutual fund and hold, that's after tax dollars you are using. If you use a SEP-IRA, that's pre-taxed.
Thank you for this informative video.
Glad it was helpful!
Can you use a SEP IRA to buy real estate?
Look into "self-directed" SEPs and you may.
The way he pronounces “contribute” tho lol
On w2 if i make 60k do i have to invest 25% or do i have a choice to invest less than that like 15% or 10 % ?
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at 2:36 you say, you can contribute up to 20%. However from what I’m reading from other sources you can contribute up to 25% or $58,000 ($61,000 for 2022 ever is lower). can you clarify? Thanks for posting!
I saw another video and if you have an LLC its 20%. Otherwise its 25%
Could a SEP IRA be rolled over to a regular IRA if for example you decide to go back being an employee instead of being self employed?
Where is LYFE Accounting located? Cali, I hope.
Can day traders open up a SEP? I keep hearing you say "earned income" and I believe capital gains would be a disqualification?
I don’t see why they wouldn’t be able to.
This video leaves a lot good info out. Like a 401k sólo triples the deductions. He’s comparing to a regular IRA only
Keep up the great work. Love these videos.
More to come!
If I sell a stock in my SEP, is that a taxable event? For example, I sell stock “A” and make “X” profit, then reinvest in another stock within the SEP?
It is not a taxable event. Only if you withdraw the money from the account.
Best video I found about SEP IRA
Thanks for a great video. I have a question. I am a freelance musician (small business account/EIN) with extra $ in my bank savings. I’m trying to put the $ into more investment strategies. I currently have a Roth, and it is maxed out. Should I have a SEP as well ? To dump extra cash in… My income is less than $100k/ year .The more than 100k in savings is money that has just built up over my life of saving. Hope to hear back.
Can I max my Roth IRA (6k a year) AND still contribute to a SEP IRA?
yes
Thank you for this info, your videos are always precise and straight to the point, appreciate this!
Thanks Michael for your continued support.
Hi, thank you for the information. Quick question, would I be able to set up a SEP IRA with an ITIN if I don't have a SSN
I am 99% sure you can
@@LYFEAccounting that's very good to know. Thank you for answering my question,
So let's say just you and two other friends make a music business can I set up this ira account for the business in case we grow hypothetically.
LYFE, I am still not understanding what happens with the money sitting in the account, is it earning interest or what? ~~ I am an independent contractor, so how often can I contribute to my account? this is August 2021 so do I have until April 2022 to contribute? and where does one start? the IRS 5305-sep? _ do I need a CPA to do this?
This is huge tax savings, thanks for explanation
You bet!
I was thinking about starting a SEP-IRA, but I already contributed to my Roth-IRA for 2021. Would I still be able to do that?
99% sure that as long as you’re eligible to invest in either one, no rule states you can’t open both a Roth IRA and a SEP IRA.
@@LYFEAccounting From the IRS website: "You can both receive employer contributions to a SEP-IRA and make regular, annual contributions to a traditional or Roth IRA. Employer contributions made under a SEP plan do not affect the amount you can contribute to an IRA on your own behalf." Dated: Mar 11, 2021
You can’t deduct Roth contributions.
ok so you need to make around 294,000 to contribute 58k???
Yeah. Look up Solo 401k. If you don’t know about it’s worth finding out about. You can put in more than that per year, traditional or ROTH, & you can borrow $50,000 or 50% (which ever is less) of that with no penalty. You’d have to pay it back (to yourself) tho.
So refreshing to see a black guy that isn't a punk.