A self-employed person who wants to contribute to a Keogh plan for 2014 must establish that plan before the end of 2014. If that is done, deductible contributions for 2014 can be made as late as the taxpayer’s extended tax return due date for 2014. However, a self-employed person who misses the year-end deadline to establish a Keogh plan has until his extended 2014 return due date both to establish and to make deductible contributions to a Simplified Employee Pension (SEP) for 2014. Keogh plans, however, can be designed to provide more flexibility for a self-employed business owner than a SEP can provide.
M&Q Recommendation: Since the contribution deadline is extended where the filing deadline has been extended, taxpayers who temporarily lack sufficient funds or are otherwise delayed in making post-year-end contributions should request an extension of time to file their return.
