Q. I want to contribute the maximum to my SEP-IRA, but my preparer is putting my tax on extension. How can I figure how much I need to contribute by the April 15 deadline?
A. Fortunately, only Traditional and Roth IRA's need to be funded by April 15th for a 2010 contribution. SEPs, SIMPLES, and the various types of other retirement plans can be funded when the tax return is filed, but not afterward! This insures you will be allowed to contribute the maximum amount. I always suggest that clients needn't wait until the last possible moment. Generally most of us have an idea of what we can contribute, so why not make the majority of the contribution in January, and then contribute the final amount by the filing date. This allows your retirement funds to grow for a longer period.
Tax Tip: There is nothing that says you can't fund your 2011 IRA right now. Why wait until next year when you can have your investments grow as early as possible. I suggest my clients fund their IRA accounts in January of each year.