Contributions to Sep IRA account for previous year

[trademark]

What is the name of your state (only U.S. law)? VA

I'm an S-Corporation and work through my company on contracts. I opened a "Sep IRA" account recently this year (2014).

1. Can I contribute to my new Sep IRA account for the tax year 2013 for the income I made in 2013? If so, is there a dead line for it?

2. How much max amount can I contribute?

3. Do I contribute as an employer or as an employee?

4. Is 401K better than Sep IRA for me and allow me to contribute more as an S-Corporation?

TIA

 

[LdiJ]

What is the name of your state (only U.S. law)? VA

I'm an S-Corporation and work through my company on contracts. I opened a "Sep IRA" account recently this year (2014).

1. Can I contribute to my new Sep IRA account for the tax year 2013 for the income I made in 2013? If so, is there a dead line for it?

Nope, the deadline was April 15th

2. How much max amount can I contribute?

20% is the maximum...of net profit

3. Do I contribute as an employer or as an employee?

As an employer...although it really doesn't matter since the income is all pass through anyway.

4. Is 401K better than Sep IRA for me and allow me to contribute more as an S-Corporation?

TIA

No a 401k would not allow you to contribute more unless you are over 50 and the 5500.00 catch-up elective deferral is allowed. and 20% is more than 51,000.

 

[davew128]

I'm an S-Corporation and work through my company on contracts.

No you're not. You're the shareholder of an s-corporation.

 

[davew128]

Nope, the deadline was April 15th

False. The corporation has until September 15th to make a contribution for the prior year.

20% is the maximum...of net profit

AGAIN....FALSE. Eligible income for an s-corporation shareholder is based on salary....and is 25%.

 

[LdiJ]

False. The corporation has until September 15th to make a contribution for the prior year.

I will concede that if I can verify it.

AGAIN....FALSE. Eligible income for an s-corporation shareholder is based on salary....and is 25%.

That is misleading Dave...or you aren't paying attention to the details. I actually looked it up again before I responded. However, I am not going to argue with you, I am simply going to tell the OP to consult a local tax pro.

 

[trademark]

Can I contribute for 2013 tax year to the Sep IRA account that was opened this year (2014)? TIA

False. The corporation has until September 15th to make a contribution for the prior year.

 

[davew128]

I will concede that if I can verify it.

http://www.irs.gov/Retirement-Plans/Retirement-Plan-FAQs-Regarding-Contributions---S-Corporation

That is misleading Dave...or you aren't paying attention to the details. I actually looked it up again before I responded.

Look closer next time. http://www.irs.gov/publications/p560/ch02.html#en_US_2013_publink10008839

However, I am not going to argue with you

That would be wise seeing as you're wrong. The 20% amount is for net SE income of a self employed person contributing to a SE. An s-corp shareholder is NOT self employed. See above. http://selfemployedretirementplans.individual401k.com

 

[LdiJ]

http://www.irs.gov/Retirement-Plans/Retirement-Plan-FAQs-Regarding-Contributions---S-Corporation

Look closer next time. http://www.irs.gov/publications/p560/ch02.html#en_US_2013_publink10008839

That link did not back up a September 15th deadline. It didn't back up any deadline. So far I haven't found anything that backs up a September 15th deadline.

That would be wise seeing as you're wrong. The 20% amount is for net SE income of a self employed person contributing to a SE. An s-corp shareholder is NOT self employed. See above. http://selfemployedretirementplans.individual401k.com

I am perhaps going to concede this issue, but your cite is not authority and our in house info disagrees with you.

 

[davew128]

That link did not back up a September 15th deadline. It didn't back up any deadline. So far I haven't found anything that backs up a September 15th deadline.

http://www.irs.gov/pub/irs-pdf/p560.pdf

Page 3.

I am perhaps going to concede this issue, but your cite is not authority and our in house info disagrees with you.

http://www.irs.gov/Retirement-Plans/Operating-a-SEP No it's not substantial authority, but the fact is its based on authority. I simply don't have the time to cite code and regs on something thats pretty well known. As for your in house authority, it wouldn't be the first time I've corrected entire firms about mistakes they're making.

 

[trademark]

Got some more answers - https://www.irahelp.com/forum-post/22409-contributions-sep-ira-account-previous-year

 

[LdiJ]

http://www.irs.gov/pub/irs-pdf/p560.pdf

Page 3.

http://www.irs.gov/Retirement-Plans/Operating-a-SEP No it's not substantial authority, but the fact is its based on authority. I simply don't have the time to cite code and regs on something thats pretty well known. As for your in house authority, it wouldn't be the first time I've corrected entire firms about mistakes they're making.

Dave, why in the world did you flat out state "September 5th"? That was horribly misleading.

Based on the link above the deadline to making contributions for a previous year is the S-corp's due date to file its tax return, INCLUDING EXTENSIONS. So its not automatically September 15th. Its only September 15th if the S-corp filed for an extension and hasn't filed their tax return yet. Odds are at least 50/50 that the S-Corp in question has already filed their tax return for 2013.

You could have put this OP in a world of hurt.

 

[davew128]

Dave, why in the world did you flat out state "September 5th"? That was horribly misleading.

Based on the link above the deadline to making contributions for a previous year is the S-corp's due date to file its tax return, INCLUDING EXTENSIONS. So its not automatically September 15th. Its only September 15th if the S-corp filed for an extension and hasn't filed their tax return yet. Odds are at least 50/50 that the S-Corp in question has already filed their tax return for 2013.

You could have put this OP in a world of hurt.

So have you updated your incorrect in house materials yet?

 

[trademark]

I filed for an extention of my 2013 return (business & personal taxes). However, I filed my returns in May already. Do I still have time to contribute to SEP-IRA for 2013 tax year for the income made in 2013 ?

 

[LdiJ]

I filed for an extention of my 2013 return (business & personal taxes). However, I filed my returns in May already. Do I still have time to contribute to SEP-IRA for 2013 tax year for the income made in 2013 ?

Get a consult with a local tax pro. As you can see from this thread, we don't agree. I don't think that you can at this point, but consult a local tax pro.

 

[davew128]

I filed for an extention of my 2013 return (business & personal taxes). However, I filed my returns in May already. Do I still have time to contribute to SEP-IRA for 2013 tax year for the income made in 2013 ?

Yes you can if you amend the returns to claim the deduction (on your BUSINESS return). The relevant cites are IRC 404(h)(1) and 415.