Advanced Underwriting Consultants

Question of the Day – September 21

Ask the Experts!

Here’s the question of the day.

Question: What are the deadlines for an employer to establish a SEP IRA or a SIMPLE IRA?

Answer: A SEP is funded with employer contributions only.  It can be set up and funded for a year as late as the due date (including extensions) of the business’s income tax return for that year.

SIMPLE IRA plans accept both employer and employee contributions.  They are always calendar year plans and ordinarily can be set up any time between January 1 and October 1 of a year.

There are two exceptions to the rule: if the employer is a new business that comes into existence after October 1 of a particular year, the SIMPLE IRA can be set up as soon as administratively feasible.  Also, if the business has ever maintained a SIMPLE IRA in the past, a new SIMPLE IRA can be established only on January 1.

Have a question for the professionals at AUC?  Feel welcome to submit it by email.  We may post your question and the answer as the question of the day.