When to Contribute to SIMPLE IRA Q

From: T Koyn <koyn@users.anet-stl.com>
Subject: When to Contribute to SIMPLE IRA Q
Date: Tue, 11 Aug 1998 23:08:02 -0500 (CDT)

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When operating a SIMPLE IRA for a sole proprietorship business with no
employees, when is the latest that one may make their contribution for the
year?  SIMPLE IRA forms from a stockbroker provide an employee deferal
form where you specify a percent of pay or dollar amount per pay period
suggesting it should be done throughout the year.  For a sole
proprietorship, one can't know what the profit or compensation is until
the end of the year when all income and expenses have been tabulated.  I
heard that the employee deferal must be within 30 days of the last day of
the month after being withheld from the employee's wages.  Does this imply
that for a sole proprietorship that the "employee" portion must be sent in
by Jan 30 of the new year under an interpretation that "wages" are paid to
oneself at the end of the year?  Are there any other interpreations of
when compensation is considered paid in a sole proprietorship that might
require money to be contributed sooner or throughout the year, e.g. does
the timing of receipt of payments from customers matter?  I understand
that the employer match can be sent until April 15.  Or is the whole
compensation issue moot and we have until April 15 to send in the entire
contribution to the broker for a sole proprietorship SIMPLE IRA?

Thanks for any information on these questions.

koyn@anet-stl.com





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