By Edward “Ed” V. O’Neal, Vice President and Manager, Retirement PlansPrint This Post
It’s that time of year where the attention of many business owners quickly turns to tax season and ways to reduce taxes—while increasing savings.
For small business owners looking for 2018 tax deductions, along with a way to jump start your retirement savings, the SEP IRA is the only employer retirement plan that can be both established and funded after the 2018 calendar year. SEP IRAs have until the due date of the business tax return (including extensions) for its creation and funding deadline. In addition, SEP IRAs are designed to be simplistic, with limited plan features. Consequently, SEP IRAs may not be appropriate for every business owner situation.
Businesses with existing retirement plans will need to be mindful of both contribution (employer and employee deferral) and tax filing deadlines for these plans. Employer contribution deadlines extend until the due date of the business tax return (including extensions), while employee deferrals should be withheld and deposited as soon as possible by business owners (generally within 15 days for 401ks and 30 days for SIMPLE IRA plans).
Whether considering a new retirement plan or reviewing contribution deadlines, remember to consult with your tax or legal advisor to review the impact to your personal tax situation.