How to Report on Form 5330- Excess Contribution SEP-IRA Self-employed with No Employees

[victortax5657]

1.  Taxpayer is Self-employed (1040-Sch. C) with no employees.

2.  Total contribution 2024 = $4,623.05

3.  2024 allowable deduction computed = $2,653

4.  Excess   = $1,970.05 How does this amount get treated on the 2024 or 2025 return and how ?

5. What line or lines on Form 5330 do I need to fill-out?

Thank you in advance 

[qbteachmt]

They ask for a return of Excess Contribution before the due date of the tax year filing, and it's moot.

[victortax5657]

I looking for some direction regarding my point 4 and 5.  Taxpayer and I prefer to apply the excess contribution for tax year 2025 before the return is filed.  If that is case, do need to file Form 5330?

Thank you in advance.

[Just-Lisa-Now-]

When did he make the contributions? 

If he made it in 2025, you can choose to use it for 2024 or 2025, Ive pushed over contributions to the next year, but it had to be made in the correct time frame. 

[qbteachmt]

There are not the same five options for excess SEP as with excess IRA. There is one option (remove it) or a penalty and leaving it in under a voluntary corrective action plan:

https://www.irs.gov/retirement-plans/sep-plan-fix-it-guide-contributions-to-the-sep-ira-exceeded-the...

I guess it depends on if you get paid by the form or the hour? Otherwise, the person requests the contribution + earnings attributable (if any) be returned, which technically belong to the employer. It isn't taxable, even though they get a 1099-R for 2025 for the action. Then they can still contribute for 2025. No penalty, no proof of voluntary corrective plan, no harm, no foul, no additional forms.