This template can help self-employed individuals calculate the maximum contribution they can make to a retirement plan. The maximum that you are allowed to contribute to a tax deductible plan is a percentage of earned income (adjusted net business profit less the contribution). This complicates matters. Because self-employed individuals are not paid a salary or wage, contributions to the plan reduce the taxpayer's earned income. Therefore, if you are self-employed and you want to contribute to a SEP-IRA, the maximum contribution is 15% of earned income which is the equivalent of 13.04% of adjusted net business profit.
To view the template, click the worksheet tab labeled Template at the bottom of the screen or press Ctrl-PgDn. With the exception of data entry cells, all cells are protected. Use the Tab key to move from one unprotected cell to the next.