Ask Experts Questions for FREE Help !
Ask
    mah-kug's Avatar
    mah-kug Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Dec 26, 2009, 12:03 PM
    What is the difference between contributing to a SEP or Roth IRA?
    I have only social security income and some contract income for 2009. Would it be better to open a SEP account for the contract income or contribute to my Roth IRA. Which would give better tax treatment?
    emilly58's Avatar
    emilly58 Posts: 2, Reputation: 1
    New Member
    		  
    #2

    Dec 26, 2009, 12:35 PM
    mah-kug,

    It depends on your overall financial situation and many other factors. This may sound crazy but I would consider other investment options, mainly hard assets such as gold, even real estate and land. It's only matter of time before inflation starts gong up and hence lower the value of any cash investments.

    Here's a link with good Roth IRA informations (basic do's and don'ts, what to stay away from, etc):

    http://www.rothirarules.net/roth-ira-investments.htm

    and

    http://www.rothirarules.net
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Dec 27, 2009, 03:16 PM
    The Roth IRA is funded with AFTER-tax income, whereas the SEP IRA is fundd with PRE-tax income.

    You can deduct your SEP IRA contributions as an adjustment to income.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

SEP-IRA deductions [ 1 Answers ]

Hi, I went on H1B from OPT in Oct 2008 so I am filing the Form 1040 NR-EZ. I am single and resident of India. My employer has a SEP-IRA plan and it contributed around $3000 towards my SEP-IRA for 2008. I opened an account with fidelity and deposited that amount there. I read that one can...

Cashing out part of IRA or ROTH IRA due to Hardship [ 1 Answers ]

Can you tell me what are the reasons that you can claim hardship on an IRA or ROTH IRA? I have been unemployed for over a year and need to cashing some of my IRA to just pay bills and live. Are there penalties and taxes that need to be paid on this money? Thanks,

Should I/how to convert IRA-BDA to a Roth IRA [ 0 Answers ]

A few years ago I inherited an IRA. It's now referred to as an IRA-BDA. It is all one mutual fund. As it stands now, when I withdraw from it I have the option of taking out 10-15% taxes on the amount withdrawn, or waiting until tax time to pay it. 1.Would it be more beneficial to change my...

View more questions Search