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04-10-2017 03:04 PM
I am a self-employed business owner. I received an inheritance from my mother's annuity in 2016. Can I include the inheritance income along with the income from my sole proprietorship to invest into a SEP IRA? Or can it only be self-employment wages?
Solved! Go to Solution.
05-24-2017 03:46 PM
The inheritance would not be considered compensation, and therefore could not be used to determine how much you may contribute to your SEP. You could certainly use the funds to make the contribution, based on the contribution amount as determined by your self-employed compensation amount.
From the IRS Website:
How much can I contribute to my SEP?
The contributions you make to each employee’s SEP-IRA each year cannot exceed the lesser of:
05-24-2017 09:51 PM
Welcome to the H&R Block community.
The most important thing to remember here is that your contribution limit for an IRA of any kind, including SEP IRA accounts, is determined in part by your earned income. Your inheritance income is not earned income and is not taken into consideration when determining how much you can contribute, however you can make contributions with any type of income.
If you have any other questions I'll be glad to help.
Senior Tax Advisor (Tampa, FL)