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SEP funding and "reason" for extension


Guest Steve Palmer

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Guest Steve Palmer

Sole proprietor will claim SEP deduction on 1040 to be filed before 4/15, but will need the refund and additional time to raise the money to fund the SEP. Second extension at 8/15 will need a reason. How does the following sound?

"Additional time needed to fund SEP under IRC 404(h)(1)(B) and Rev. Rul. 84-18"

Does the IRS even read these things?

Thank you.

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An excuse that prevents the return from being completed on time would be much better. Once the extension is granted the return can be filed (claiming the deduction) and the contribution can be made up until the extended due date.

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Guest Steve Palmer

Thank you for your response.

To clarify, you recommend that the 2688 be filed a week or so after the 4868, rather than in August, so we have the approved extension to 10/15 by the end of May, then file the return?

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NO. I would first consider getting an automatic extension (Form 4868). Before that extension runs, File Form 2688 for an additional extension. Both Forms have instructions on when to file.

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