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SEP and SIMPLE IRA Plan Deadlines

With the year-end fast approaching, you need to be aware of certain deadlines. One important one and one that is very often misunderstood has to do with the date by which a SIMPLE IRA Plan must be established.

Per the IRS FAQs: “You can set up a SIMPLE IRA plan effective on any date between January 1 and October 1, provided you (or any predecessor employer) didn’t previously maintain a SIMPLE IRA plan. If you’re a new employer that came into existence after October 1 of the year, you can establish the SIMPLE IRA plan as soon as administratively feasible after your business came into existence. If you previously created a SIMPLE IRA plan, you must set up a new one effective on January 1.

With October 1 right around the corner, anyone wanting to establish a SIMPLE IRA Plan should seek their legal and tax counsel immediately.

If you want to create a new SEP IRA Plan, you have additional time. The deadline for establishing new plans is the due date of the business tax return plus extensions. For a calendar year business, the date would be October 15 of the year following the business tax year.

Terry White

About Terry White

I started my business career after getting my degree in Accounting from the University of New Mexico in 1983. My first job was as a controller for a local title company, and in 1987 I started First Financial Escrow, Inc. Over the years I played a part in several startup companies including First Financial Equities, Inc., First Financial Trust, Inc., First Financial Marketing, Inc. and Asset Ventures, Inc. In 1997 First Financial Escrow, Inc. was able to purchase the escrow accounts from Sunwest Bank and changed its name to Sunwest Escrow. As the market changes, Sunwest has grown and changed along with it. Besides my wife, Sheila, we have three boys, two daughters-in-law, one grandson, another grandson on the way and a future daughter-in-law. Sunwest is my passion, and I enjoy coming to work every day to see what will happen next. I enjoy fly fishing, spending time in Colorado, biking and watching my boys play soccer.