The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  (SEP)IRA - Reporting Year of Contribution Date:  2/25/2001  10:43 PM
Author:  ptsurmr Number:  47167 of 127637

This question is about a SEP-IRA contribution in particular, but I think it applies for any IRA contribution...

I recently moved my SEP-IRA from one broker to another. Over the last couple of years I have made my final SEP-IRA contribution in Jan or February of the calendar year following the current tax year. This year was not different.

In February 2001 (before filing my year 2000 tax returns) I made my final tax year 2000 contribution. I included my customary note to the broker indicating that I would like this contribution to count as a tax year 2000 contribution, and to call me if they had any problems.

Well, previous broker never had a problem. My statement would indicate the contribution for the preceding calendar year. New broker, however, says that they will not do this, nor is it necessary. New broker indicates that they will report this contribution to the IRS as having been received in 2001, and that they do not know how the IRS will become aware that it is really for my tax year 2000 (something about form 5498, pg 43, indicates that the broker is obligated to report the deposit in the calendar year it was received).

Does this sound kosher? Doesn't the IRS match what I report I contributed for the tax year against what my broker indicates they received? What if next year, during 2001, I contribute the max allowable to this SEP-IRA. Then the broker will be reporting these max allowable contributions PLUS the earlier tax year 2000 contribution (made in 2/2001), pushing my total calendar year contributions beyond the max allowable tax year contributions. This is surely a red flag, no?

In summary, is the reporting method utilized by the new broker acceptable (even though it disagrees with how I will be reporting my contributions)?

Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us