Discussion:SEP contribution/distribution in same year
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Discussion Forum Index --> Tax Questions --> SEP contribution/distribution in same year
| 10 October 2006 | |
| What happens in this scenario?
Taxpayer (w/ Sch C.) deposits $24,000 into new SEP in 2005 as 2005 contribution. Later in 2005 withdraws everything in the account, which is the $24,000 already put in plus appx. $8,000 in earnings. Of course, actual Sch. C income is only about $12,000. Do I have figure out what the actual max SEP allowed was, deduct, then treat as taxable premature distribution (as well as $8,000 in earnings), with the excess being withdrawn tax-free and penalty-free? Or can the taxpayer remove the whole contribution in the same year contributed penalty-free, except for the earnings? | |
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