The Motley Fool Discussion Boards
Financial Planning / Tax Strategies
|Subject: Re: SIMPLE IRA||Date: 4/21/1998 10:16 PM|
|Author: TMFTaxes||Number: 3622 of 121061|
[[I've started my own S-Corp, with myself and my wife as the only employees. I also have the
materials to set up a SIMPLE IRA with AmeriTrade. The questions I have is whether I need to
make the contributions to the SIMPLE IRA on a monthly basis, or if it is 'legal'(with the IRS) to
make a lump sum contribution at the end(or start) of the year?
The reason I ask is that right now we would like to use the money to pay down CC debt, and then
focus on getting the IRA cash together later in the year.]]
An employer must make elective salary reduction contributions to the SIMPLE IRAs of all eligible employees no later than the 30th day of the month following the month in which the amounts would otherwise have been payable to employees in cash. 31. The Department of Labor has informed IRS that, as a matter of enforcement policy, for SIMPLE plans, salary reduction contributions must be made to employees' SIMPLE IRAs as of the earliest date on which the contributions can reasonably be segregated from the employer's general assets, but in no event later than the 30-day deadline described above.
An employer must make matching contributions or nonelective contributions to financial institutions maintaining SIMPLE IRAs no later than the due date (including extensions) for filing the employer's tax return for the tax year that includes the last day of the calendar year for which the contributions are made. In other words, the employer's contributions must be made no later than the last date for which contributions are treated as made for the tax year.
Hope this helps...
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