I work freelance. Some of the jobs I do use a payroll service so its W-2 and for others I invoice so its 1099. I belong to a union and they have an annuity in which contributions are made from the W-2 jobs I do. I also file jointly with my wife who has a 401k at her work. I'm getting killed with taxes on my 1099 work. I was thinking about a tax deductible IRA but my tax guy tells me I can't because I file jointly with my wife and she has a 401k and also because of my union's annuity. However, I was talking to a financial planner and he said this wasn't correct. So what gives? Can I do a tax deductable IRA or not? Do I have any other options?
Ask your tax guy about a SEP. Your self employment (1099) income can generate a basis for a sep contribution up to 25% (roughly) of your net income from your 1099's. You can even wait until you file your return to make the required contribution. That means October 15th. However, some brokerage houses are anal about when the SEP account is setup. There are other things that enter into the equation, but from what you've said I would say you are eligible for the SEP. Remember the tax is due on April 15th. An extension exrends the time to file not the time to pay. Rick
