LLP Deposit Deadline

[Rob P]

This year the IRS accelerated the deadline for filing partnership tax returns from 10/15 to 9/15. As such, we’ve been telling our clients that they need to fund their discretionary profit sharing contributions for their 2008 calendar year plans by 9/15/09 (opposed to 10/15 in the past).

Assuming a partner has the proper deferral election form in place by the end of the plan year (12/31/08 in this case), is it allowable that a partner can still make their 401(k) deposit by 10/15/09 or should they be made by 9/15/09 too?

Conservatively, I’ve been telling clients 9/15, but I was wondering if anyone has an opinion?

Thanks for any input.

[Bird]

I think contributions are due by the filing due date of the entity, so 10/15 is ok - for tax purposes - for a partner's deferrals. I agree, to be conservative, 9/15 is cleaner. And we're trying to get self-employed taxpayers to make their 401(k) contributions within 7 business days of the end of the year so the "late deposit" issue doesn't have to be considered.

[Rob P]

Bird - Thanks for the response.

Most of our clients (self-employed) defer throughout the year, so "late deposits" are not an issue. It's just those few stragglers that always wait until the last minute to do their taxes and make deposits. I was grateful to get them to agree to make defer deposits by 9/15.