Help - In A Few Days I'm Going To Have To Put Some Money In A 'SEP' .....

[global1]

as am self-employed and March 15th is my deadline. For tax purposes - I need to contribute to this plan - yet I don't know where to put the money as I have lost all confidence in the whole financial establishment. Any suggestions?

Also - it just occurred to me that many other business owners are going to be facing the same decision as well. Does anyone think that this tax deadline will be stimulative?

[endarkenment]

1. talk to your accountant or prof. tax preparer

I believe you can file an extension and defer putting anything anywhere until October. As far as I know March 15 is not the deadline even if you don't file an extension. April 15 is the deadline. Oh - if you are acting as the employer your deadline is March 15.

"Sole proprietors have until April 15, or to their extension deadline, to make their SEP-IRA contribution if they want a tax deduction for the prior tax year."
http://invest-faq.com/articles/ret-plan-sep-ira.html

[sybylla]

2. Here's a couple of options that I've taken advantage of in the past

First, if you want to buy some time for making that deposit, file an extension. Our accountant did that for us twice and it allowed us to hold off making that sepp deposit until the extension filing deadline - August 15th. I'm guessing your deadline is March 15 because your business is a farm. If that's the case, this may not work for you as there seem to be loads of special tax rules for farms.

Second, we're not making a sepp deposit this year simply because we didn't make enough money. But if we were, we'd be opening up sepp accounts at the local credit union (preferred) or bank and putting the money in certificates of deposit. With government-insured CD's you can invest short term or long. The interest rates suck but at least you know for the short term you won't lose everything you just deposited because of a schizophrenic stock market. And, eventually, when the economy or stock market settles down, you can transfer that money to a higher-yield higher-risk investment.

I used to work in the banking industry in retirement accounts 25 years ago. That doesn't make me an expert now. If you pay your accountant well, he or she should have more idea that the two I offered.

Good luck. And congratulations on making enough money to make a sepp deposit.

[kirby]

3. Doesn't your SEP-IRA allow parking in cash?

My contributions are in Treasuries

[mainer]

4. Right. You don't have to make any decisions until you're ready.

I held cash in my SEP for quite a few months, waiting to choose which stocks to purchase. You don't have to "do" anything with the money, just deposit it in the account prior to the deadline.