SEP Contribution Calculation Issue

Forum|Forum|2 years ago
January 29, 2024
2 replies
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I think there is something going on with the calculation of taxes due associated with a SEP contribution. I was exploring various amounts to see the effect on my refund and no matter I enter my refund goes down. Pretty sure the opposite should happen.

The larger my contribution, the more is taken off of my refund.

TurboTax Home & Biz Windows

Bsch4477

This is a known issue. Programmers are working on it.

MonikaK1

As @Bsch4477 stated, this is an issue that is being worked on.

TurboTax programmers are currently implementing some recent IRS changes for reporting SEP and SIMPLE plan contributions. While there isn't an estimated date when the changes will be done, you can test this by editing your W-2 every 5-7 days to check on the status.

On January 8, 2024, the IRS released a notice (within that bulletin, search for Employee Plans) describing many changes required to implement the Secure Act 2.0. If you try to enter Code S for Box 12 of your W-2, you may see this message: "We're updating how SEP and simple plan contributions are reported on the tax return based on new guidance from the IRS."

Section 601 of the Secure Act 2.0 refers specifically to Simple and SEP Roth IRAs. Code S in box 12 defines how to handle a SIMPLE plan.

These last-minute IRS (and law) changes often cause implementation delays for TurboTax and other tax processors.

Please be patient while TurboTax works to understand all the ramifications of this IRS Notice then code and test the changes.

@jammer2000

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jammer2000Author

I have received 2 updates to TurboTax since I reported this issue and the issue persists. Will there be a notification or something when this issue is resolved? Should I use another Tax software? I am getting extremely frustrated with the matter.

PatriciaV

The estimated date of release is February 15, 2024. We recommend waiting until the day after, then updating TurboTax (if using Desktop), and run Review again. The hold on Schedule C should be resolved.

There is no notification sign-up for this update, but TurboTax does update each time you open the program.

@jammer2000

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