Opening SEP IRA for '06--Am I missing anything?

[Jeff W]

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...

[mo42nyy]

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.

[The4Aces]

I am pretty certian for the SEP IRA you have to have had the paperwork filledout and filed before the end of 06...

[Jeff W]

[ 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."

[Jeff W]

[ 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.

[Preem]

[ 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.

[TheMetetron]

[ 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.

[riverdance]

i'm almost positive you have to have it funded by 4-17-07 to be considered a 2006 sep contribution.

[TLC]

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.

[TLC]

[ 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.