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SEP contribution

I have two business/sole proprietor. For one I file a Schedule C. It is profitable. The other is farming (I file Schedule F) which almost always has a loss. I combine the two incomes and file a SE which means that my SS taxes are reduced by the farming income (loss). I have a SEP associated with the Schedule C business and I put 20% of the profit each year into my SEP. I called the IRS three times and each time they said this was correct even tho it is not

20% of the total on the SE. Is this correct? And why can't I save 25% like most do on a SEP? Is there a better retirement Plan?
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Reply to
gail
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You are saving 25%. When you put 20% of the pre-SEP amount into the SEP it means the SEP is then 25% of the net amount.

Start with $1000. Put $200 into a SEP. That leaves $800 for you. $200 is 25% of $800.

-- Vic Roberts Replace xxx with vdr in e-mail address.

Reply to
Victor Roberts

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