For clients with SEP and Roth SEP IRAs, you can enter ongoing contributions within the Savings section of the Profile (or the Savings step of the initial data entry process). These savings cards can be added by clicking Add Saving in the upper right, and selecting either SEP IRA or Roth SEP IRA:
SEP IRA Savings Data Entry
Click on this card to open a data entry drawer on the right side of your screen, allowing you to input the contribution information. The steps below outline the data entry process for SEP IRA savings, but data entry for Roth SEP IRA savings is identical:
1
The Saving name will default to [Client's] SEP IRA, but you can enter a custom name if you'd like. In joint plans, you will also want to choose either the client or the co-client as the Owner.
2
Enter the client's annual Contribution to their SEP IRA. Depending on the option you choose in the Target field, this can be an annual dollar amount, a % of the client's income, or the maximum contribution amount.
3
Specify the duration of the contributions using the Saving starts and Saving ends fields. By default, these will be set to 'Already started' and '[Client's] retirement' respectively.
4
When entering an annual dollar amount, you can choose to specify an optional Annual increase in the lower left of the card.
What does "Self-employed" do?
Checking the Self-employed box will cause this card to calculate contributions based on the client's Self-employment income, rather than Salary income.
Additional Information
Contribution Limits and Taxation
For salaried clients, all contributions are employer contributions. SEP contributions will be capped at the lesser of 25% of the client's salary, or the IRS maximum ($69,000 for 2024).
With the 'Self-employed' box checked, all contributions are employee contributions. The contribution will be capped at 18.47% of the client's self-employment income (with a maximum income limit of $345,000 for 2024). Traditional SEP IRA contributions will be treated as Adjustments to Income (Line 16 of the Schedule 1, Line 10 of the 1040).
Sample tax forms can be viewed in the Tax > Tax Estimate > Details tab:
Cash Flows Location
Client contributions (self-employed checked) can be tracked in two locations within the Retirement > Cash Flows:
- The Summary tab > Planned Savings column
- The Invested Asset tab > Planned Savings column
Employer contributions (self-employed unchecked) can be found in the Invested Asset tab > Employer Match & Other column.
Like other employer-sponsored plans, contributions to SEP plans will always occur within the cash flow projections, even in years with cash flow deficits.
