Follow these steps to enter or change a plan contribution rate for SEP, SIMPLE or qualified plans:
- Go to Screen 24, Adjustments to Income.
- Scroll to the SEP, SIMPLE, Qualified Plans section.
- Enter the applicable fields to indicate the maximum:
- Profit-sharing (25%/1.25) (1=maximum)
- Money purchase (25%/1.25) (1=maximum)
- Defined benefit (no limitations)
- Self-Employed SEP (25%/1.25) (1=maximum)
Enter the desired rate in the Plan Contribution rate (.xxxx) [O] field.
Please refer to this resource for information about each input.
Commonly asked questions about SEP, SIMPLE and qualified plans
How do I troubleshoot diagnostic ref. 3420 taxpayer's SEP deduction was disallowed?
- Go to Screen 24, Adjustments.
- Scroll down to the SEP, SIMPLE, Qualified Plans section.
- Make sure the entry in Self-employed SEP (25%/1.25) (1=maximum) is entered under the correct Taxpayer or Spouse column.
- Check to ensure that the self-employment income has flowed to the desired form.
Statutory employee income is not combined with self-employment income. If you have gross receipts that should be self-employed income you should create a separate Schedule C on Screen 16, Business Income (not linked to the wages entered on Screen 10, Wages).
