Friends,
Many individuals have already made retirement plan contributions for 2021, but some plans allow for contributions until the 2021 tax return is filed. See below for different options and contribution deadlines.
- 401(k) Plan – employee contributions must be complete by calendar year end (12/31).
- Solo 401(k) Plan – The solo 401(k) plan must be established by 12/31/2021 in order to make employee contributions. A plan can be established after 12/31/2021, but only the employer profit-sharing contributions are accepted and must be complete by the tax-filing deadline.
- SEP IRA - a SEP IRA can be established after the calendar year and contributions can be made similar to the employer contributions above – by the tax-filing deadline (including extensions). Some might be able to delay contributions for 2021 as long as October 15th, 2022 if an extension is filed.
- Defined Benefit Plan – owners must adopt and fund the plan before the 2021 tax return deadline.
- Back-Door Roth – for those individuals who employ the strategy of contributing to a traditional IRA and then converting to a Roth on a yearly basis, you have until your individual tax-filing deadline.
Please let us know if we can help with retirement contribution strategies.
Matt and Andrew