Support CenterWhy does line 1 under SEP-IRA Keogh on the SE Plan Wkt show a percentage of 20% instead of 25% when using SureFire
Per Pub 560 on pg. 15:Deduction Limit forSelf-Employed Individuals
If you make contributions for yourself, you needto make a special computation to figure yourmaximum deduction for these contributions.
Compensation is your net earnings fromself-employment, defined in chapter 1. This definition takes into account both the following
items.
The deduction for the deductible part ofyour self-employment tax.
The deduction for contributions on your behalf to the plan.
The deduction for your own contributionsand your net earnings depend on each other.
For this reason, you determine the deductionfor your own contributions indirectly by reducingthe contribution rate called for in your plan.
Todo this, use either the Rate Table for Self-Employed or the Rate Worksheet for Self-Employed in chapter 6. Then, figure your maximum
deduction by using the Deduction Worksheetfor Self-Employed in chapter 6.
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