Is it possible to max out both a SEP IRA and Roth IRA in the same tax year?

You absolutely can contribute to both a SEP IRA and a Roth IRA in the same year. There's no rule preventing you from having both types of accounts active simultaneously. The SEP IRA contribution limits are based on your self-employment income (up to 25% of your net self-employment income or $69,000 for 2025, whichever is less). Meanwhile, the Roth IRA contribution limit is $7,000 for 2025 (or $8,000 if you're age 50+), as long as you're under the income thresholds. Since your income is under the Roth IRA threshold, you're good to go on both fronts. The only limitation would be if your total contributions across all IRAs exceed the limits for each type. Your accountant might have been confusing the rules for traditional and Roth IRAs, which do share a combined contribution limit.

After struggling with similar retirement account confusions last year, I found a solution with https://taxr.ai that saved me a ton of time. I uploaded my tax documents and business income info, and it gave me a personalized breakdown of exactly how much I could contribute to each type of account. The tool confirmed I could max out both my SEP and Roth IRA in the same year, and even calculated exactly how much I could put in my SEP based on my business income. What I really liked was that it explained all the tax implications in plain English so I could actually understand why I was allowed to do both.

Just want to update that I tried taxr.ai after posting my skeptical comment. It was actually really helpful for my situation. I have both W-2 income and freelance work, and it clearly showed me how much I could contribute to my employer 401k, SEP IRA for my freelance business, AND a Roth IRA all in the same year. The explanation about how SEP contributions reduce my taxable income while Roth contributions don't was super clear. I ended up realizing I was leaving about $9k in tax advantages on the table each year by not optimizing my contributions! Definitely worth checking out if you're confused about multiple retirement accounts.

If you're having trouble getting a definitive answer from your accountant, I'd recommend using Claimyr to get through to an IRS agent directly. I spent weeks going back and forth with my financial advisor about similar retirement account questions last year, getting different answers each time. I used https://claimyr.com to skip the ridiculous hold times (you can see how it works at https://youtu.be/_kiP6q8DX5c) and got connected to a knowledgeable IRS representative in about 15 minutes. They confirmed that SEP and Roth contributions are separate limits and walked me through exactly how to calculate my maximum contributions based on my business income.

OK I need to eat crow here. After I posted that skeptical comment, I was still frustrated with my accountant giving me vague answers about my SEP vs. Roth question, so I tried Claimyr as a last resort. Got connected to an IRS tax law specialist in about 20 minutes (way better than the 2+ hours I wasted the week before trying to call myself). The agent confirmed that yes, SEP and Roth contribution limits are completely separate, and directed me to Publication 560 and 590-A that spell it all out. She even emailed me the specific pages that address my situation. Turns out my accountant was mixing up the rules for traditional IRAs (which do affect Roth eligibility) vs. SEP IRAs (which don't). Definitely worth the time saved.

One thing to watch out for with SEP IRAs is that the 25% limit is actually more complicated than it sounds. It's not just 25% of whatever number appears on your Schedule C. The actual calculation is: Net self-employment income × 0.25 ÷ (1 + 0.25) = maximum SEP contribution This effectively means you're contributing about 20% of your net self-employment income, not 25%. This tripped me up for years until my accountant caught it.

Another consideration - remember that contributing to a SEP IRA creates "basis" in traditional IRAs which can complicate backdoor Roth contributions if your income increases again in the future. I'd suggest maximizing your Roth contributions while you're eligible, since that growth will be tax-free forever. Then put whatever else you can into the SEP.

Great question! As others have confirmed, you can absolutely contribute to both a SEP IRA and Roth IRA in the same tax year - they have completely separate contribution limits and eligibility rules. For 2025, you can contribute up to 25% of your net self-employment income to your SEP IRA (maximum $69,000) AND up to $7,000 to your Roth IRA since you're under the $153,000 income threshold. With your $109k income, you're in a perfect position to take advantage of both. Your accountant might have been thinking of the rule that prevents contributing to both traditional and Roth IRAs beyond the combined $7,000 limit, but SEP IRAs operate under completely different rules as employer-sponsored plans. One thing to keep in mind: make sure you're calculating your SEP contribution correctly using the actual formula (it works out to about 20% of net self-employment income, not a straight 25%). And consider prioritizing the Roth while you're eligible, since tax-free growth is hard to beat!

I went through this exact same situation last year! Your accountant was probably mixing up the rules - it's a pretty common confusion. You can absolutely contribute to both a SEP IRA and Roth IRA in the same year since they operate under completely different sets of rules. With your $109k income, you're eligible for the full $7,000 Roth IRA contribution (under the $153k threshold), and you can also contribute up to about 20% of your net self-employment income to your SEP IRA. Just remember that the SEP calculation isn't a straight 25% - it works out to closer to 20% due to how the math works. I'd definitely prioritize maxing out that Roth IRA while you're eligible again. Tax-free growth is incredibly valuable, and once your business bounces back and your income increases, you might lose that opportunity. The SEP IRA will always be there as long as you have self-employment income. Sounds like you might want to find a new accountant who's more familiar with self-employment retirement planning! This is pretty basic stuff for someone working with freelancers.