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Discussion:W2 "retirement plan box" active participant in SEP?
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Discussion Forum Index --> Advanced Tax Questions --> W2 "retirement plan box" active participant in SEP?
Discussion Forum Index --> Tax Questions --> W2 "retirement plan box" active participant in SEP?
ReadMyLips (talk|edits) said: | 28 February 2013 |
| I have a 4 employee corporate client, one shareholder. They do their own payroll and the W2 retirement box is not checked, although they do have a SEP which they contribute to on occasion. The owner/shareholder would have to contribute for the other employees so doesn't want to make a SEP contribution. He would not be able to make a deductible IRA contribution if the retirement box 13 on the W2 was checked. Sine they do their own payroll, I'm not sure that the W2 is correct. My question: should the retirement box on the W2 be checked because they do have a SEP plan available, even though they didn't contibute in 2012 and won't do so in 2013 for 2012. The decision to make a SEP contribution isn't usually made until the following year, so they won't know that for purposes of the W2 retirement box until after they are filed.
Any imput is appreciated. | |
| 28 February 2013 | |
| Based on the facts given so far, the box should not be checked. If ultimately a SEP contribution is made for 2012, the box would be checked for 2013. It's primarily a cash basis concept for defined contribution plans such as a SEP or 401(k). It also involves the plan's fiscal year, which presumably is the calendar year. But the answer is different if a contribution was made in 2012 for 2011. In that case the box would be checked for 2012. See Notice 87-16. | |
ReadMyLips (talk|edits) said: | 28 February 2013 |
| Thanks Marty. I just came across 87-16 and thought the same, good to have your input. | |
| February 28, 2013 | |
| Interesting. Never heard or thought about this. So you're saying a contribution made in 2013 for 2012 checks the W2 box in 2013, tainting them from IRA's and all in 2013? Crazy. Scary. I wonder how many of those I've screwed up over the years...no, I don't want to know. | |
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