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QUESTION DETAIL
Related User
Votes
In February 2014, I withdrew $10,000 from my SEP-IRA for personal expenses. I did not roll it over within 60 days. I understand that I will suffer a 10% penalty and be taxed on the $10,000 withdrawal. If I make a new $10,000 contribution to my SEP-IRA, will that at least offset the tax consequences on the $10,000 withdrawal, excluding the 10% penalty?
ANSWER
The BIDaWIZ Team's Answer:
Yes, a $10,000 contribution to your SEP-IRA will reduce your adjusted gross income and offset the tax consequences from the withdrawal of the same amount. This is referenced in Internal Revenue Code Section IRC 408(k) and IRS Publication 590.
