Important Dates to End 2021 Strong
You helped your client find the perfect plan design to help meet their retirement needs. Now you need to make sure they fund it and get the tax deduction too! To be deductible for tax year 2020, employer contributions to defined contribution (DC) plans must be deposited by the due date of the company’s tax return, including extensions:
- September 15: S Corporations, Multi-member LLCs, and Partnerships
- October 15: C Corporations (that operate on a calendar year), Sole Proprietors/Single member LLCs taxed as Sole Proprietor
Remember: All defined benefit (DB) plan contributions must be deposited by September 15th, regardless of the business tax filing due date.
Also: The extended deadline for filing form 5500 is October 15.
Looking Forward: 2021 Plans
If the client is setting up a new qualified plan for the 2021 tax year, mark these dates on your calendar! If you already have a proposal, you are ahead of the curve – but the proposal may not be valid if you and your client wait too long …
- October 1: New Safe Harbor 401(k) plans must be established and ready to receive employee deductions. If your proposal contains a safe harbor 401(k) plan, your client will need to decide whether or not to move forward within the next few weeks!
- November 2: Employees and trustees must be notified of a SIMPLE plan termination for 2021. If your client has a SIMPLE plan in 2021 and wants a different plan for 2022, the SIMPLE plan must be terminated prior to January 1, 2022.
- December 2: For those clients with a 2021 Safe Harbor 401(k) plan, the employees must receive the annual Safe Harbor notice.
Stay on track and ahead of the game – make sure you know the next due date so you and your clients don’t miss out on their qualified plan opportunity!