Simple IRA for self employed person

Forum|Forum|3 years ago
October 28, 2022
6 replies
35 views

Just confirming. I have not had this in a while. A self employed person can contribute to a Simple IRA with catch up provision in the amount of $16,500 for 2021. Are they also allowed to contribute 3% of their Schedule C earnings?

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qbteachmt

Level 15

This article covers it:

https://www.irs.gov/retirement-plans/simple-ira-tips-for-the-sole-proprietor

You are asking about the 3% that is "employer" match.

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KimmyjackAuthor

Level 5

The thing I wanted to confirm is that the $16,500(which includes catch up) is not the maximum that can be deducted on the tax return. You can take the $16,500 plus the 3% matching?

What is confusing me is that there is an employer contribution mentioned(the 3%), but the employer is the sole proprietor contributing the $16,500.

qbteachmt

Level 15

Follow that link, read that article, especially follow the math at the part for, "Your total plan contribution is $5,200."

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