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SEP - 01/31 FIscal Year End


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We have a client who maintains a SEP in accordance with his company Fiscal Year End of 01/31. It appears his contribution limit for the 01/31/2013 plan year is the 2013 limit of $51,000, this amount is less than 25% of his compensation. Would he take the deduction for this 2013 contribution on his 2012 (02/01/2012 - 01/31/2013) company tax return?

Thanks,

Chuck

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  • 3 weeks later...

Flyboyjohn - Your suspicion was correct, the SEP is on a calendar year as it is on IRS Form 5305. Just to confirm, the 25% contribution limit would be based on the compensation from 01/01/2012 - 12/31/2012 and the 25% deduction limit would be based on the compensation from 02/01/2012 - 01/31/2013?

Thanks for the reply,

Chuck

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