I want to contribute to my SEP for the 2017 year (25% of my 1099 income, which amounts to about $6000), which I then want to convert to ROTH, and I want to contribute to a nondeductible IRA ($5500), which I also want to convert to a ROTH. Am I allowed to do this, with contributions from both incomes?
As others have stated, you need to set up a solo-401k rather than a SEP, which is just an employer form of IRA. You'll be able to do the backdoor Roth without the prorata rule coming into plan with the 401k.
You will be able to contribute 20% of net profits from your side gig (the 25% limit is for W2 income but they both come out to the same amount). You'll have until the due date of your income tax return, including extensions, to contribute but you must set up the 401k by 12/31/17. This is important because you won't be able to figure out how much you can contribute until you know the net profits via preparation of your 2017 income tax return.
On a side note, is this advisable to maximize retirement savings? I am currently in the highest tax bracket.
Sure. No need to r/o the 401k into a Roth and pay the taxes, though.
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