SEP IRA Contribution Deadlines

Featured Image

The tax filing deadline is now in the rearview mirror. April 15 marked the due date for our personal tax returns and our last chance to make 2018 IRA contributions. That is, unless you hold a SEP IRA. SEP IRA holders have until their business tax filing deadlines to make contributions into their accounts. In many cases, these deadlines lie well beyond the mid-April cut-off for individuals with non-SEP accounts. You may also file for an extension with the IRS, which would extend your contribution deadline in turn.

The SEP IRA contribution limit for 2018 is the lessor of $55,000 or 25% of annual compensation. The dollar amount threshold increased to $56,000 in 2019, though again if it is less than 25% of compensation. Are you a business owner who has been meaning to open a SEP IRA? If you do so before your business tax filing deadline, you can still make a 2018 contribution even though we are well within the 2019 calendar year.

SEP IRA contributions are 100% tax-deductible for the business. This provides an immediate tax benefit while allowing you garner tax-deferred earnings from the alternative investment options that your SEP IRA can hold. As with other self-directed IRAs, your SEP account can hold real estate, precious metals, or any other alternative asset you deem suitable for your retirement. With the near ten-fold contribution abilities of a SEP IRA over Traditional or Roth IRAs, you can allocate a sizable portion of tax-advantaged dollars toward your desired strategy if you so choose.

You would only have to pay taxes upon distribution (withdrawal) of cash or assets from your account. However, if you wait until later in life when you are earning less per year and have presumably entered a lower income tax bracket, your distributions may be taxed at a lower rate.

For more information about SEP IRAs or alternative IRA investments, please don’t hesitate to give us a call at 877-742-1270 or send us an e-mail at