Author Topic: Can you put interest income in a SEP IRA?  (Read 430 times)

bb11

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Can you put interest income in a SEP IRA?
« on: January 28, 2019, 06:16:32 AM »
I started a couple of checking accounts to get the sign-up bonuses. This income is reported on a 1099-INT. Can I put the money (up to the contribution maximum, 20% of self-employment earnings) into a SEP IRA?

If yes, what about other types of interest income, like regular interest from bank accounts?

Basically, I can't find the definition anywhere for what qualifies as "self-employment income". Certainly the bank was not my employer when they gave me the sign-up bonus.

seattlecyclone

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Re: Can you put interest income in a SEP IRA?
« Reply #1 on: January 28, 2019, 09:14:50 AM »
I would say no. Self-employment income is from running your own business. Signing up for bank account bonuses isn't a business, it's just smart shopping.

bb11

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Re: Can you put interest income in a SEP IRA?
« Reply #2 on: January 29, 2019, 06:30:52 AM »
Ok thanks. Can anyone else confirm?

walkwalkwalk

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Re: Can you put interest income in a SEP IRA?
« Reply #3 on: January 29, 2019, 08:26:48 AM »
Ok thanks. Can anyone else confirm?
He is correct.

Padonak

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Re: Can you put interest income in a SEP IRA?
« Reply #4 on: January 30, 2019, 05:20:30 PM »
How about income from selling tradelines? Can you put in a SEP IRA? Is it earned income or can it be claimed as income from a hobby?

BikeFanatic

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Re: Can you put interest income in a SEP IRA?
« Reply #5 on: January 30, 2019, 06:31:04 PM »
I had Tradeline income of 8K last year and did have to declare as businessincome, Like you I put 20% in an sep IRA for 2018 . I heard in the tradeline thread someone else who did that also. I do wonder though if that contribution is tax deductable, becasue right now I havent been aboe to decuct my IRA due to high income.  Any ideas?

seattlecyclone

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Re: Can you put interest income in a SEP IRA?
« Reply #6 on: January 30, 2019, 09:04:46 PM »
Yes, SEP IRA contributions are deductible on your taxes. The normal income limits for IRA deductibility do not apply to these.

kpd905

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Re: Can you put interest income in a SEP IRA?
« Reply #7 on: February 02, 2019, 05:36:13 AM »
How about income from selling tradelines? Can you put in a SEP IRA? Is it earned income or can it be claimed as income from a hobby?

Yes, tradeline income can go into a SEP IRA.  It is characterized as "Non-employee Compensation" or line 7 on the 1099 form.  I am wondering if people will have any luck getting the 20% qualified business income deduction as well on their tradeline income.  Would be nice to get both deductions.

walkwalkwalk

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Re: Can you put interest income in a SEP IRA?
« Reply #8 on: February 02, 2019, 09:40:50 AM »
How about income from selling tradelines? Can you put in a SEP IRA? Is it earned income or can it be claimed as income from a hobby?

Yes, tradeline income can go into a SEP IRA.  It is characterized as "Non-employee Compensation" or line 7 on the 1099 form.  I am wondering if people will have any luck getting the 20% qualified business income deduction as well on their tradeline income.  Would be nice to get both deductions.
My guess is if they have been paying self employment taxes on it in the past (meaning they treated it like business income), they have a higher likelihood of it being treated as a business, thus the IRS should allow the 20% deduction.

Padonak

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Re: Can you put interest income in a SEP IRA?
« Reply #9 on: February 02, 2019, 12:23:47 PM »
Never heard of the 20% deduction for business income. Is there a specific term i can google to read more about it? Is that in addition to the tax benefits of SEP IRA?

kpd905

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Re: Can you put interest income in a SEP IRA?
« Reply #10 on: February 02, 2019, 12:58:05 PM »
Never heard of the 20% deduction for business income. Is there a specific term i can google to read more about it? Is that in addition to the tax benefits of SEP IRA?

Mad Fientist actually had a CPA come and do a guest post all about the deduction: https://www.madfientist.com/section-199a/