Fiscal Year and IRA’s

Submitted by steve jackson on Thu, 2020-09-17 16:25

Can A business with a fiscal year ending 10/01/2020
Do deductible IRA’s for 2 married owners if they still otherwise qualify under income ect. rules.
Can they also estabilish a SIMPLE IRA plan for fiscal tax year ending 10/01/2020 as well so long as it is set up and funded prior to 10/01/2020. They would be setting up and funding now in the current month of September.
Thanks
Steve



Submitted by steve jackson on Sat, 2020-09-19 10:07

why is this not an applicable question?

Submitted by steve jackson on Sat, 2020-09-19 10:08

Why is this not applicable question 

Submitted by steve jackson on Sat, 2020-09-19 10:09

Why is this not applicable question 

Submitted by Alan - IRA critic on Sat, 2020-09-19 17:45

  • Per Notice 98-4 Q 3, SIMPLE IRAs must be established on a calendar year basis. The following is from that Notice.
  • Q. A-3: Can a SIMPLE IRA Plan be maintained on a fiscal year basis? A. A-3: A SIMPLE IRA Plan may only be maintained on a calendar year basis. Thus, for example, employer eligibility to establish a SIMPLE IRA Plan (see Q&As B-1 through B-5) and SIMPLE IRA Plan contributions (see Q&As D-1 through D-6) are determined on a calendar-year basis. 

Submitted by William Tuttle on Sun, 2020-09-20 11:30

  • Individuals normally open, contribute to and deduct traditional IRA account contributions.
  • While a business can set up payroll contributions to the traditional IRA accounts of their employees. Such contributions are not deductible by the business, are considered taxable compensation to the employee and the employee must deduct them on their tax return.
  • SIMPLE IRA contributions will make them “Active Participants” in an employer retirement plan. This will subject them to the traditional IRA MAGI limits on the deductibility of traditional IRA contributions.
  • If they have no employees, they may be better off with a one-participant 401k plan.

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