SEP-IRA and Traditional IRA Contributions

[southerndoc]

I am an independent contractor who receives income reported as a 1099. I am currently contributing to a SEP-IRA up to the maximum amount allowed by my salary and the IRS. This is done from my "employer" (me acting as the employer, since I'm my own employer and I'm not incorporated).

Does anyone know if I can also contribute to a traditional IRA?

[MonkeyMama]

Yes, you can. (Assuming you are eligible otherwise).

[m3racer]

yes you can but it may be a nondeductible IRA based off of your income.

[Alex_Adviser]

The SEP-IRA behaves just like a Traditional IRA to an employee. But from an employer perspective, there is no contribution limit, even if the employer and the employee is the same person (often the case with self-employment). If you can contribute $10,000 to the SEP-IRA as an employer, you can still contribute $4,000 to it (or any other IRA) as an employee.

Now, back to your specific scenario. If you’ve contributed to a SEP-IRA as an employer, you can still contribute to it or a Roth IRA as an employee up to $4,000. If you then contributed to the SEP-IRA as an employee or another Traditional IRA, then you would deduct it on your taxes. If you contributed to your Roth IRA, you would never deduct it on your taxes.