SEP IRA

Archive for the ‘SIMPLE IRA’ Category

Question: Does the last paystub of the year match the w2?

I have my last paycheck stub of the year, received 12/20/2006. I was wondering if it will be the same as my w2. I don’t pay into an IRA or 401K, my taxes are very straight forward and simple. I don’t even pay into health insurance. I just received my new paycheck stub for 2007 yesterday, 1/3/2007, and the amount I made for the pay period matched the Y-T-D information. Does that mean my w2 will match my last paystub? I’m considering filing with my last paystub. I’ve been at the same job for 6 yrs, and have my previous w2s to get the EIN. Is it legal to do that? Thank you.

Answer: The pay check should be the same as your w-2 based on info you have given, I’m also assuming you don’t have a pension plan either. If you are thinking about going to one of those “we’ll get your refund from your w-2″ places, I would advise against it. They are pretty much giving you a loan, they know you wil be getting back 1000, so they give you 700 today, and they collect 1000 in a month. But keep in mind, there is a slight chance that the company may need to amend your w-2, in that case, the information may be different.

If your return is only one w-2 you can file a 1040 EZ. It’s VERY easy to follow and will allow you to keep all the money you have loaned to the government this year.

SIMPLE IRA Deadlines

This section of SEP IRA & SIMPLE IRA Information website is about deadlines for establishing SIMPLE IRA Plans and the deadlines for finding SIMPLE IRA Plans.

What is the deadline for establishing a SIMPLE IRA Plan?

A SIMPLE IRA plan must be established by October 1 in order for SIMPLE IRA Contributions to be made for the current year. All SIMPLE IRA Plans must use the calendar year for all purposes (plans that start after January 1 and up to October 1 use a “short” year ending December 31 for their first plan year).

The SIMPLE IRA plan is adopted when the employer completes and signs the SIMPLE IRA Employer IRA Agreement. An employer may establish a SIMPLE plan effective on any date between January 1 and October 1 of any year, provided the employer did not maintain a SIMPLE or any other retirement plan during the same year.

A new employer may establish a SIMPLE plan as soon as administratively feasible (even after October 1).

If an employer previously maintained a SIMPLE plan, the employer may establish a SIMPLE plan effective only on January 1 of any year. If the employer maintains any other form of qualified retirement plan (pension, profit sharing, money purchase, 401(k), etc.) for which any employee either accrues an additional benefit or makes or receives a Contribution during a year, the employer may not maintain a Simple Ira Plan during the same year.

Other plans must be terminated or frozen before the SIMPLE may be established. This is known as the “One Plan Rule“.

What is the deadline to fund a Simple Ira Plan?

There are two types of Simple Ira Contributions:

• Salary deferral contributions and
• mandatory employer contributions. Each type of SIMPLE IRA Contribution has its own deadline:

Salary Deferral Simple Ira Contributions: Salary Deferral Simple Ira Contributions must be deposited to the employees’ SIMPLE IRA accounts as soon as reasonably feasible but in no event later than 30 days after the month of deferral. Sole-proprietors can delay making the employee salary deferral Contribution until the business’s tax filing due date plus extensions.

Example: Salary withheld during the month of December 2004, must be deposited as soon as reasonably feasible but in no event later than January 30, 2005.

Mandatory Employer Simple Ira Contributions: Mandatory employer Simple Ira Contributions (either matching or nonelective) for a year may be deposited at any time up to the due date for the employer’s Federal income tax return for the year, including extensions.

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