#1
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Opening SEP IRA for \'06--Am I missing anything?
I want to open a SEP IRA and max out my contribution for 2006(Self Employed Pro Gambler). I am not going to have it funded before April 17. Are these the right steps?
1. File form 4868 - Application for Automatic Extension of Time To File U.S. Individual Income Tax Return. Include 2006 tax payment to avoid interest payments(I've already completed my tax return). Under Table 1 of Pub. 560 it says the last date for contribution is "Due date of employer's return (including extensions.)" 2. Complete the 5305-SEP "Simplified Employee Pension--Individual Retirement Accounts Contribution Agreement" 3. Fill out E*Trade IRA Application and send it in with instructions to transfer $X to the IRA from my brokerage account. 4. Fund the IRA. 5. File my tax return. Am I missing anything? I've read the forms and publications over and over and it seems to be that simple. I'll call IRS tomorrow but I don't know if I can hope to get through to a representative 1 day before taxes are due. Thanks. I hate the US tax system... |
#2
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Re: Opening SEP IRA for \'06--Am I missing anything?
hmm i did mine on Vanguard a few weeks ago but never filled out a 5305-SEP "Simplified Employee Pension
I added the sep acocunt online then called them up and asked if there was anything else i needed to fill out and they said no. |
#3
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Re: Opening SEP IRA for \'06--Am I missing anything?
I am pretty certian for the SEP IRA you have to have had the paperwork filledout and filed before the end of 06...
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#4
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Re: Opening SEP IRA for \'06--Am I missing anything?
[ QUOTE ]
I am pretty certian for the SEP IRA you have to have had the paperwork filledout and filed before the end of 06... [/ QUOTE ] Everything I've read suggests you're incorrect. From Pub. 560 (pg. 6): "You can set up a SEP for a year as late as the due date (including extensions) of your income tax return for that year." |
#5
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Re: Opening SEP IRA for \'06--Am I missing anything?
[ QUOTE ]
hmm i did mine on Vanguard a few weeks ago but never filled out a 5305-SEP "Simplified Employee Pension I added the sep acocunt online then called them up and asked if there was anything else i needed to fill out and they said no. [/ QUOTE ] Pub. 560 Pg. 5 under "Setting Up a SEP" "1. You must execute a formal written agreement to provide benefits to all eligible employees." "You can satisfy the written agreement requirement by adopting an IRS model SEP using Form 5305-SEP." I think that you are an eligible employee even if you're a business of one, but who the [censored] knows. |
#6
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Re: Opening SEP IRA for \'06--Am I missing anything?
[ QUOTE ]
I am pretty certian for the SEP IRA you have to have had the paperwork filledout and filed before the end of 06... [/ QUOTE ] I have a CPA firm do my taxes every year. This is the first year (2006) that I qualify for a SEP IRA. My accountant said that I have until April 17 to set up and fund the SEP IRA account. Here's a bit of trivia. The reason taxes are due on the 17th and not the 16th is that April 16th is Emancipation Day and is a holiday in the District of Columbia. |
#7
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Re: Opening SEP IRA for \'06--Am I missing anything?
[ QUOTE ]
2. Complete the 5305-SEP "Simplified Employee Pension--Individual Retirement Accounts Contribution Agreement" [/ QUOTE ] I never did this and I don't think it is necessary for Self-Employed persons with no other employees. If I'm wrong, someone tell me now. |
#8
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Re: Opening SEP IRA for \'06--Am I missing anything?
i'm almost positive you have to have it funded by 4-17-07 to be considered a 2006 sep contribution.
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#9
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Re: Opening SEP IRA for \'06--Am I missing anything?
Per IRS Retirement Plans FAQs regarding SEPs:
Is there a deadline to set up a SEP? A SEP can be set up for a year as late as the due date (including extensions) of the business’s income tax return for that year. What is the timeframe for depositing contributions into SEP-IRAs? Contributions for a year must be deposited by the due date (including extensions) for filing your Federal income tax return for the year. |
#10
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Re: Opening SEP IRA for \'06--Am I missing anything?
[ QUOTE ]
hmm i did mine on Vanguard a few weeks ago but never filled out a 5305-SEP "Simplified Employee Pension I added the sep acocunt online then called them up and asked if there was anything else i needed to fill out and they said no. [/ QUOTE ] No big deal. Vanguard probably meant that they didn't need anything additional from you. You don't need to file 5305-SEP w/ the IRS. You just need to complete it, keep a copy in your records, and give a copy to every employee. |
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