SEP IRA - The Best Way to Make Money Moves for Your Portfolio

You can generally open SEP IRAs at all major brokerage firms without much fuss. The common way to get your EIN number is by establishing an LLC or otherwise incorporating your business. If you're currently someone who dabbles in the backdoor Roth IRA strategy for earners over the Roth IRA income limit, be careful.

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One of the trickiest things about investing in retirement accounts is that by the time you know how much you could’ve contributed for a tax break, it’s too late (e.g., you can only make 401(k) contributions through Dec. 31).

But there are a few accounts in the tax-advantaged investing world that allow contributions right up until the tax deadline, making them incredible options for last-minute savings.

After all, I prefer deductions that come from investing over deductions for spending: Why would I spend $100 to save $32 when I could invest (read: keep) $100 to save $32?

Reminder: I’m not a licensed tax professional. Please consult your CPA and do your own research before making big money moves.

Learn more about our sponsor, TaxAct: https://www.taxact.com/moneywithkatie

Transcripts can be found at podcast.moneywithkatie.com.

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Mentioned in the Episode

The Traditional IRA: https://www.irs.gov/retirement-plans/ira-deduction-limits
3 Ways to Lower Your Tax Bill & Navigate Rollover IRA Forms: https://moneywithkatie.com/blog/3-ways-to-lower-tax-bill-rollover-ira-forms
2022 & 2023 IRA deduction limits: https://www.irs.gov/retirement-plans/2023-ira-deduction-limits-effect-of-modified-agi-on-deduction-if-you-are-not-covered-by-a-retirement-plan-at-work
The Roth IRA: https://www.irs.gov/retirement-plans/roth-iras
Roth IRA Income Limitations: https://www.irs.gov/retirement-plans/plan-participant-employee/amount-of-roth-ira-contributions-that-you-can-make-for-2022
The Backdoor Roth IRA: https://www.youtube.com/watch?v=QTODFAUIBhY&ab_channel=MoneywithKatie
The Money with Katie Show on building a diversified portfolio: https://youtu.be/qTkVMGi3dFg
SEP IRA Contribution Limits: https://www.irs.gov/retirement-plans/plan-participant-employee/sep-contribution-limits-including-grandfathered-sarseps
Self-employment tax: https://www.ssa.gov/pubs/EN-05-10022.pdf
Solo 401(k) deadline: https://www.mysolo401k.net/solo-401k-faq-when-is-the-deadline-to-open-a-solo-401k-for-2022-and-make-2022-401k-contributions
High-Deductible Health Plans (HDHP): https://www.irs.gov/publications/p969
HSA Contribution Limits for 2022: https://www.fidelity.com/learning-center/smart-money/hsa-contribution-limits
Saving on FICA tax via the HSA: https://www.voya.com/voya-insights/importance-educating-employers-hsa-program-fica-savings