SEP IRA and Roth IRA

I am self employed and was thinking of opening a SEP IRA to reduce my 2008 AGI. If I contribute before 4-15-09 will I be able to deduct this on my 2008 return? Also, if I have a Roth IRA, can I still open a SEP???

Lisamc,

A SEP can not be a ROTH IRA.

SEP contributions for the soleproprietor are deducted on 1040 line 28.
If you are a partner, the contributions are shown on your K-1.
Deductions for employees are deducted on Schedule C.

For more information on SEP see IRS PUB 560, Retirement Plans for Small Businesses.

Yes, you can contribute to your ROTH IRA if you otherwise qualify for a ROTH IRA.

I do qualify for and already have a Roth IRA. If I contribute NOW to a SEP IRA, do you know if I can still deduct that on 2008 1040 (line 28)? I did not know if contributions would be retroactive to the 2008 return. Thanks for your help.

lisamc,

You need to read through chapter 2 of IRS Pub 560, Retirement Plans for Small Business: http://www.irs.gov/pub/irs-pdf/p560.pdf.

Page 3 has a nice table with much information that you are asking.

You may also want to look at chapter 5, there are several work sheets there for the self employed.

Contributions to a Roth IRA are dependent on your income, so eligibility depends a great deal on your income for 2008. You can check your Roth IRA Eligibility (www.2008rothira.com/2008rothiraeligibility.htm) at 2008 Roth IRA (www.2008rothira.com)