What is the max amount that you can contribute to a SEP in 2001 and 2002?

July 16, 2001

Subject:  max. contribution to SEP
Date:  Sat, 30 Jun 2001
From:  Hugo Knuesel

Hello,

I would like you to enlighten me on this:
What's the max. $ amount that can be contributed to a SEP in 2001 and in 2002?

Thanks for your advice.
Hugo Knuesel

Answer

Date:  Wed, 11 July 2001

Hello Hugo,

The maximum limitation for each year may be limited by the maximum compensation amounts.

The maximum contribution for 2000 was 15% of $170,000 or $25,500. Since the maximum compensation for 2001 is the same, the same limit applies.

The maximum contribution for 2002 will be the lesser of $40,000 or 25% of $200,000, so it will be $40,000.

The IRS publication for Retirement Plans for Small Business is Publication 560. SEPs are discussed at pages 5 and 6 of the 2000 publication. The update for the new tax law won’t be released until next year.

I hope you find this information helpful.
Mike Gray

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