Hi,
Got some income that we were told should be declared as self-emploment income and to open a SEP_IRA, now turns out that it could be considered royalties instead - and be treated as LTCG, which is less of a tax bill, but now I have the SEP_IRA in place - what to do? Will I incur a penalty on the SEP-IRA? HOw or can I even shut the SEP_IRA right away?
Thanks for any advice
and to open a
treated as LTCG,
Will I incur a
If it's for 2011, call the custodian ASAP and ask if you can back out the contributions. If you can, the most you'd have to pay penalties on is gains between the time you contributed and the time you backed it out, which in this economy isn't likely to be a whole lot.
R's, John
Problem is - I have also filed my taxes and paid the bill for the year declaring the income as self-employed and that I had contributed to a SEP_IRA and my accountant doesn't want to handle this until after 4/17, by then I think it would definitely be too late to avoid incurring a penalty of some kind?????
It wasn't his fault, nor mine, but I'm concerned about waiting until after 4/17, however, if he decides that it should be income not royalties and I've already backed out the SEP_IRA - I could be in trouble for that too. The reason we are revisiting this is a document turned up today suggesting that the income could be considered royalties - let's just say - someone got an earful as I only filed the taxes last Thursday :-(
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