In early 2017, I made a $5500 contribution to my SEP IRA for my 2016 taxes. However, I ended up not being eligible for the IRA tax deduction. However, a 2016 Form 8606 was filed showing that the $5500 contribution was non-deductible. However, it was not converted to a Roth IRA (didn't know that you could do a back-door Roth IRA that way).======> excess contributions are included in employees' gross income. Employees who withdraw the excess contribution plus earnings before the due date for their federal return, including extensions, will avoid the 6% excise tax imposed on excess SEP contributions in an IRA. Excess contributions left in the employee?s SEP-IRA after that time will be subject to the 6% tax on the employees? IRAs, and the employer may be subject to a 10% excise tax on the excess nondeductible contributions.but the 10% excise tax does not apply to any contribution made to meet the minimum funding requirements in a money purchase pension plan or a defined benefit plan. Even if that contribution is more than your earned income from the trade or business for which the plan is set up, the difference is not subject to this excise tax.
This year (2017), I will be eligible for a IRA tax deduction.Can the 2016 SEP IRA contribution be used as a 2017 SEP IRA contribution instead through some type of amendment? For example, re-file the 2016 Form 8606 showing that $0 was made as non-deductible IRA and then use the $5500 for a deductible 2017 contribution?=====>>You may file a 5329 with the 1040X and paid 6% penalty on the excess (Part III). This way you can leave the money in yur SEP account for the following year. (Note: Since 5329 is a stand-alone return, it can be filed separate from the amended return.)In this scenario, you must also file a 5329 for 2017, showing the amount carried from the previous year of 2016 (enter in Part III, Line 9). This amount is then reduced by the amount you choose to apply to 2017 SEP. If you use the excess for your 2016 SEP, then no further penalties would be due, but you would still need to file a 5329 for 2017 showing this.
If you've already nearly maxed out your 2016 SEP, you can either carry forward any excess to 2017(and pay another 6%) or you can withdraw. .Since you made SEP contributions that are more than the deduction limit , I mean, nondeductible contributions, you can carry over and deduct the difference in later years. the contribution can essentially be carried forward indefinitely. However, the carryover, when combined with the contribution for the later year, is subject to the deduction limit for that year. If you also contributed to a defined benefit plan or defined contribution plan. If you contribute more to the plans than you can deduct for the year, you can carry over and deduct the difference in later years, combined with your contributions for those years. Your combined deduction in a later year is
limited to 25% of the participating employees' compensation for that year. For purposes of this limit, a SEP is treated as a profit-sharing, I mean, defined contribution plan. However, this percentage limit must be reduced to figure your maximum deduction for contributions you make for yourself. for more accurate pro help,please contact an IRS enrolled agent/a CPA doing taxes in your local; area for your fed/state returns.
If not, can the 2016 SEP IRA contribution be changed to a 2016 Roth IRA contribution through some type of amendment this late in the game?========>I guess you need to contact your RETIREMENT PLAN AMIN FOR MORE aCCURATE INFO IN DETAIL.