Hi. I made $209,415 from my sole proprietorship business. Can I contribute the 20% max of the net business income ($33,211) to a SEP-IRA, $5,500 to a traditional IRA (NOT Roth), and $5,500 to my husband's traditional IRA (not ROTH), and all of it ($33,211 + $5,500 + $5,500) will be tax deductible? My husband has only $15 of other income and no retirement from an employer. Thank you for your help.

Hi. I made $209,415 from my sole proprietorship business. Can I contribute the 20% max of the net business income ($33,211) to a SEP-IRA, $5,500 to a traditional IRA (NOT Roth), and $5,500 to my husband's traditional IRA (not ROTH), and all of it ($33,211 + $5,500 + $5,500) will be tax deductible?=====>yes on 1040 so no taxable income no tax liability unless your SECA tax reported on 1040 line 74 is larger than the number on line 63.

My husband has only $15 of other income and no retirement from an employer========>>As mentioned bove;

I'm sorry, but I do not understand your reply.

sorry for the confusion; as yous aid, yes.SEP-IRA, $5,500 to a traditional IRA (NOT Roth), and $5,500 to your husband's traditional IRA (not ROTH), and all of it ($33,211 + $5,500 + $5,500) will be tax deductible ; they are reported on page 1 of 1040

Thank you for the clarification. My concern is that the contribution to the SEP counts as coverage under an employer's plan, which would make the traditional IRA contributions not deductible given the income level. But the contribution to the SEP does NOT count as coverage under an employer's plan? Is that certain?

?=====>> Contributions to a SEP are tax deductible the IRS treats SEP contributions separately from those made to a personal IRA, it allows employer contributions to your traditional IRA. If the SEP permits non-SEP contributions, you can make regular IRA contributions (including IRA catch-up contributions if you are age 50 and older) to your SEP, up to the maximum annual limit. However, the amount of the regular IRA contribution that you can deduct on your income tax return may be reduced or eliminated due to your participation in the SEP plan. there are income limitations that may affect how much you can deduct for your contributions to your IRA. So, some IRA contributions could be non-deductible, partly deductible or totally deductible.

Employer contributions made under a SEP plan do not affect the amount you can contribute to an IRA on your own behalf. SEPs are funded by employer contributions only. Catch-up contributions apply only to employee elective deferrals. However, if you are permitted to make IRA contributions to your SEP account, you may be able to make catch-up IRA contributions.. SEP plansallopw you, as an employer, to set aside money in retirement accounts for yourself and your employees. An ?employee? is not only someone who works for you, but also includes you if you receive compensation from the business. In other words, you can contribute to a SEP-IRA on your own behalf. So, A SEP IRA may be a good option for employers who want to make high contributions to their own SEP account

I'm sorry, but I still don't think my specific concern has been answered. My concern is that the contribution to the SEP counts as coverage under an employer's plan, which would make the traditional IRA contributions not deductible given the income level. But the contribution to the SEP does NOT count as coverage under an employer's plan? Is that certain?

I'm sorry, but I still don't think my specific concern has been answered. My concern is that the contribution to the SEP counts as coverage under an employer's plan, which would make the traditional IRA contributions not deductible given the income level.===Correct as you said previously; you can contribute to both SEP and traditional IRA. However,, the SEP counts as an employer provided retirement plan so the deduction for the traditional IRA is subject to the income level.aslongas you are covered by a retirement plan , say, SEP, at work or through self-employment, then, your traditional IRA deduction may be reduced or eliminated.

But the contribution to the SEP does NOT count as coverage under an employer's plan? Is that certain?======>>I do not think so; A contribution to a SEP is considered as covered by an employer plan. There is a contingency for SEP contributions made after the calendar year where the employee is considered as covered in the year the actual deposit was made. This is due to the discretionary nature of the SEP contribution. A SEP IRA plan can be established by a business owner with employees. A SEP IRA is funded 100% by the employer, employees do not contribute.
When a SEP IRA is established each eligible employee would open their own separate SEP IRA account. Annually the employer would make a contribution to their own SEP IRA account and to each eligible employee's SEP IRA account.
you may contact a retirement plan professional or a representative of a financial institution that offers retirement plans .

thank you!