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McLeod County, MN | Just got done with the tax man. He is suggesting that I contribute $15,000 to my SEP IRA. As it sits right now I owe $25,500 federal yet and another $500 to the state after all my estimates and my wife's payments from her job. If I put the $15k into the SEP I go down to $22,000 federal and I would be looking at $500 refund from the state. So I save about $4,350 in tax to put $15k into the SEP from the quick figuring he did. I am ready to buy ag land now and I have been thinking of buying a couple recreational properties up north to fix and flip in case work gets slow for me this summer. I realize the money doesn't vanish if I put it into the SEP, but it makes it unusable for many years.
What would you do in my position and why? I am leaning towards paying the tax to keep the cash liquid so I don't have to have much financing if I want to flip a few properties before the year is up. BTW, the 20% deduction was a MASSIVE savings for me!! I'm open to suggestions and thanks for the help. | |
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SEP IRA/ Tax question
