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Tax Law (Questions About Taxes)/accidental over-contribution to SEP IRA

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Question
For the first 9 mos of this year (2012), I was self-employed.  I contributed the max $50k to my SEP IRA (which was perfectly in line with IRS rules given the amt of consulting fees collected in first 9 mos).

However, I took a full-time job recently and now want to contribute to the company's 401k plan and receive the company match. But I don't think I am allowed to contribute any $$ given that I've already maxed out on my SEP IRA, correct?

Should I call my broker and tell them I accidentally put too much in my SEP IRA and withdraw roughly the same amt that I plan to put into my new company's 401k plan? If so, should I consider both my contributions AND my employer's contributions when calculating this amt?

Do employer matches count towards the total annual max that can be contributed to IRAs & 401ks?

Answer
Trey,

Thanks for your question.

Call your broker and tell them why you wish to make the withdrawal.  You may or may not be able to do so.  If you can, you should withdraw an amount of prior contributions equal to the amount  you wish to invest in the 401(k).  Employer contributions do not count here.

Hope this helps.

John Stancil, CPA  

Tax Law (Questions About Taxes)

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John Stancil, CPA

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I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

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I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

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DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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