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It’s Not Too Late for a Tax Break - Start a SEP Retirement Plan for 2013

If you own a business, you still have time to set up a Simplified Employee Pension (SEP) plan for 2013. If you set up and fund your SEP by the due date of your 2013 business return (including extensions), you can still take a deduction for 2013.

If your business uses the calendar year for its tax year, the deadline to set up and contribute to a SEP plan for 2013 depends on the type of your business organization:

  • If your business is a corporation, filing Form 1120 or 1120S, you have until March 15, 2014 (September 15, 2014, if you file for an extension).

  • If your business is a partnership, filing Form 1065, you have until April 15, 2014 (September 15, 2014, if you file for an extension).

  • If your business is a sole proprietorship, reported on Schedule C of Form 1040, you have until April 15, 2014 (October 15, 2014, if you file for an extension).

You can set up a SEP plan for little or no cost at a bank, investment firm or insurance company.

SEP plans offer high contribution and deduction limits, minimal paperwork and no annual Form 5500 filing. You can contribute to a SEP plan even if you participate in an unrelated employer’s plan (for example, a 401(k) plan). Contributions to a SEP plan are subject to the SEP contribution limits.

Other kinds of business-sponsored retirement plans must have been established before the end of 2013 in order for the business to get a deduction for 2013.

Additional resources:
Publication 560, Retirement Plans for Small Business
Publication 4333, SEP Retirement Plans for Small Businesses
SEP Plan FAQs
SEP Checklist
SEP Plan Fix-It Guide

Page Last Reviewed or Updated: 16-Oct-2014