Blog
February 5, 2019
Deductibility Deadlines
To deduct the employer contributions made to your company retirement plan for any given year, plan contributions must be deposited no later than the due date (including extensions) of your federal tax return. Below is a summary of the deadlines for a calendar year tax filer:
|
Tax Status |
Deadline |
Extended Deadline |
|---|---|---|
|
C-Corporation (or LLC taxed as C-Corp) |
April 15 |
October 15 |
|
S-Corporation (or LLC taxed as S-Corp) |
March 15 |
September 15 |
|
Partnership (or LLC taxed as a part) |
March 15 |
September 15 |
|
Sole Proprietorship (or LLC taxed as sole prop) |
April 15 |
October 15 |
It should be noted the Form 5500 Annual Return/Report Employee Benefit Plan, otherwise referred to as the “tax return” for an employer sponsored retirement plans, has a due date of July 31st for all entities shown above. The Form 5500 is not filed until the contribution is made to the plan, so if your business uses an extension for its tax filings, it will be necessary to also request an extension on the Form 5500.
IMPORTANT
C-Corporations and Sole Proprietorships that choose to wait until their tax filing deadline (October 15th), make it unlikely the Form 5500 will be completed on time, considering the Form 5500 is due on the same day.
Benefit Equity’s recommendation is no matter what kind of entity you may be, get your company contributions into the investment account(s) before September 15th, to provide our team the necessary time to prepare your tax return in a timely matter.
The late penalty imposed by the Internal Revenue Service is $25.00 per day and the IRS is very current on their billing for late filers. Although we have not yet seen the Department Labor impose this penalty, it is a whopping $2,140 a day. You read this correctly… this equates to $2,140.00 per day. As a “word to the wise,” don’t wait until the last minute to deposit your retirement plan contribution, since the Form 5500 isn’t filed until the company has deposited their money to the Plan.
Your plan representative at BEI is always available to answer any questions you have about plan operations and please contact us early at 800-899-9141 or email us at planservices@benefitequity.com.
Author: Robert Gorelick, APA, Founder Benefit Equity Inc.