Retirement plan deadlines

A SEP can be opened up to the filing deadline with extensions. A SIMPLE closes on 1 October. A solo 401(k) sits between the two and the rule changed recently.

Only one of the three lines up with the date most people are thinking about their taxes, which is why the deadline is worth checking in autumn rather than in spring.

The three cut-offs

The SEP is the forgiving one. It can be set up and funded as late as the due date of the return for that year, extensions included. irs.gov That is the reason a preparer reaches for it in March: it is the only one that can still be opened while the return is being written.

The SIMPLE is the unforgiving one. A plan can take effect on any date from 1 January to 1 October, and after that the year is closed. irs.gov There is one exception, and it is narrow: a business that comes into existence after 1 October may set one up as soon as administratively feasible.

Nine months of the year are available and nobody is thinking about it during eight of them.

The solo 401(k) rule that changed

This is where advice written before 2023 is actively wrong.

The old rule was simple and harsh: the plan had to exist by 31 December to accept anything for that year. Miss it and the year was gone.

For 2023 and later, a sole proprietor with no employees can adopt a 401(k) after the end of the tax year, provided the plan is adopted by the tax filing deadline without regard to extensions. irs.gov

Two constraints make that narrower than it sounds, and both are routinely dropped from summaries of it:

It is a first-year provision. It covers adopting a plan you did not previously have. It does not let somebody with an existing plan make a late election for a year that has closed.

“Without extensions” is doing real work. The general rule for adopting a qualified plan is the filing deadline including extensions. irs.gov This exception deliberately does not include them, so filing an extension does not buy more time here — which is the opposite of how every other deadline on this page behaves.

The distinction that catches people: elected against deposited

For an owner-employee the employee deferral has two dates, not one. The deferral must be elected by the end of the tax year and can then be deposited by the filing deadline including extensions. irs.gov

The employer contribution has no such split. It is due by the filing deadline including extensions, and it can be decided on at that point, which is why the employer side is where most of the late-in-the-day flexibility lives.

What to do about it, by month

One case makes the December date matter more than it looks: rolling an existing SEP into a solo 401(k), which is the fix for a closed backdoor Roth, needs the 401(k) to exist first.

Before 1 October: the only month that matters for a SIMPLE. If a SIMPLE is under consideration at all, it is decided here or not at all.

December: the month for a solo 401(k) election. If a plan exists, the deferral election has to be made now. If no plan exists and this would be the first, December is still the safer month even though the deadline moved — the extension carve-out does not apply to the exception.

Filing season: the SEP window, and the employer-contribution window for a solo 401(k) that already exists. This is the point at which the amount can still be adjusted after the year’s profit is actually known, which is a genuine advantage of the employer side.

Where this stops being a calendar question

If you took on an employee during the year, every deadline above still applies but the plan choice underneath it may not survive — a SEP requires proportional contributions for eligible staff and a SIMPLE requires a match. The deadline is not the binding constraint at that point; the plan is.

Which plan to open in the first place turns on contribution room — and on one rule that usually decides it before room does. The two decisions are worth making in that order.