The National Directory of Certified Public Accountants

Ask A CPA - 5 Last Minute Refund Tips

If You Are Self-Employed, Take Advantage Of An SEP Plan

Employers can contribute up to a quarter of the salaries that each employee earns (25%)up to an annual maximum limit. For 2017, that maximum will be $54,000, up $1,000 from its 2016 level. That's the first rise in the SEP IRA limit since 2015, For self-employed. the 25% refers to the self-employed worker's "net earnings" from the business. The net result of the math is that the 25% limitation on "net earnings" works out to 20% of your adjusted profit after the self-employment tax adjustment in a Simplified Employee's Pension Plan. Self- employed individuals can even take the deduction on their 2016 tax return and fund the pension plan as late as six months from April 18, 2016 if they file for an extension to file their return.

If you need professional help with "5 Last Minute Refund Tips" or have other tax questions, we can help you find a local licensed CPA for a free, no-obligation consultation.