Effect of IRS disaster relief on SEP IRA contributions
Taxpayer is located in Florida. 2022 Form 1040 was on a valid extension to Oct 16 2023. Due to Hurricane Idalia, the filing deadline was further extended to Feb 15 2024. The 2022 return has not yet been filed. The taxpayer has Schedule C income and would like to set up and fund a SEP IRA to be deductible for the 2022 tax year. It would appear that with the extended due date of Feb 15 2024, there is still time to make and deduct a 2022 contribution. However, 2 different brokers were approached and they both said their internal deadline has passed and they can no longer accept and report any amounts received as a 2022 contribution. Since the whole idea behind the IRS disaster extensions is to help affected taxpayers, it seems there must be a way to get this done. Maybe the only option at this point is to make the contribution before the Feb 15 2024 deadline, have it reported as a 2023 contribution and then deal with IRS notices that might subsequently be received. Curious as to how others have handled this situation. Any suggestions? Thanks!
Permalink Submitted by Alan - IRA critic on Sat, 2023-12-30 00:44
Taxpayer should be able to make the contribution. Unlike TIRA or Roth contributions, IRA custodians only report SEP contributions in the year they are made in Box 8 of Form 5498, they do not assign the year they are for, as that is done by the SEP owner on their tax return. If the IRA owner applies a contribution made in early 2024 as a 2022 SEP contribution the IRS should accept it.