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Self Employed SEP calculated very high

Forum|Forum|3 years ago
February 19, 2023
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I asked TurboTax to "maximize" my SEP contribution for 2022. I am self employed and made about the same amount as last year, yet the SEP calculation is nearly 3 times as high as it was the prior year! This can't be correct, can it?

Best answer by AliciaP1

@AliciaP1

Thank you! Here's the token number.

1076241

The calculation is correct. While you can only deduct 25% of your net income as a SEP deduction, you can contribute up to 100% of your net earnings. So, since you have the maximize box checked, TurboTax is calculating using 100% of your net earnings. If you want to maximize your deduction, you will need to calculate the 25% and enter that instead of checking the maximize box.

@DebJRB

T

ThomasM125

I can't see your numbers so I can't comment on their reasonableness. Your SEP maximum contribution should not be more than 25% of your self-employment income though.

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D

DebJRBAuthor

Right. Thanks. Then it's calculating it incorrectly. It's about 50% of my income, over 50% of net. What am I doing wrong to get this? Or How do I let TurboTax know there's something wrong with their calculation?

AliciaP1

It would be helpful to have a TurboTax ".tax2022" file that is experiencing this issue.

You can send us a “diagnostic” file that has your “numbers” but not your personal information.  If you would like to do this, here are the instructions:

Go to the black panel on the left side of your program and select Tax Tools.

Then select Tools below Tax Tools.
A window will pop up which says Tools Center.
On this screen, select Share my file with Agent.
You will see a message explaining what the diagnostic copy is.  Click okay through this screen and then you will get a Token number.
Reply to this thread with your Token number. This will allow us to open a copy of your return without seeing any personal information.

We will then be able to see exactly what you are seeing and we can determine what exactly is going on in your return and provide you with a resolution.

@DebJRB

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