Don’t Forget These Important Year-End Financial Deadlines

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2017 is almost in the rearview mirror. While your mind may be more on presents than on savings, the end of the year is an important time to make sure you don’t miss annual financial deadlines. Here are a few common ones to consider. 

1. 401k/403b/457 Plan

  • If you are an employee of a hospital or group, the deadline to make employee contributions is generally 12/31/17.
  • Under age 50, the max contribution is $18,000. For 50 and up it’s $24,000 ($18,000 plus $6,000 catch up).
  • If you want to max out before year end, make changes to your payroll ASAP.
  • Note that if you participate in both a 401k and 403b plan simultaneously, you cannot contribute double those amounts.

2. SEP IRA (Self-Employed)

  • Assuming you are an independent contractor, have not formed a corporation, and you’ve set up a SEP IRA, then your deadline is 4/17/2018 which is the income tax filing deadline for 2018 – or if you file an extension to your tax return, it’s 10/15/18.
  • The max contribution is 20% of your net adjusted self employment income.
  • However if you’ve formed a corporation and you’re paying yourself a salary, then your deadline is 3/15/18 (or 9/17/18 if filing an extension) and your max contribution is 25% of your salary.

3. Individual 401k (Self-Employed)

  • Assuming you are an independent contractor, have not formed a corporation, and you’ve set up an individual 401k, then deadlines are the same as the first SEP IRA deadlines above.
  • However, in addition to 20% of your net adjusted self employment income (as described in the SEP IRA plan above), you can make an employee contribution as described for the 401k plans above as well.
  • The rules change if you’ve formed a corporation and you’re paying yourself a salary. In this case your deadline for the employee contribution is 12/31/17 and for the remaining contribution (employer) the deadline is 3/15/18 (or 9/17/18 if filing an extension) and your max employer contribution is 25% of your salary.

4. Traditional and Roth IRAs

  • For both of these accounts the absolute deadline is 4/17/18 even if you file an extension.
  • For people under 50, contribution is $5,500. For those over 50 it’s $6,500.
  • Note that you may not be able to contribute directly to a Roth IRA if your income is too high, but you can contribute to a traditional IRA regardless of how high your income is and you can contribute to a traditional IRA even if you make contributions to a 401k, 403b, or SEP IRA.

5. Taxable (Brokerage Account)

  • Some physicians have asked me if there is a deadline for making contributions to a taxable (brokerage account). The answer is no. The reason is that contributions to taxable (brokerage) accounts don’t impact your tax return directly whereas contributions to other accounts described above (except Roth IRA) do impact your tax return.

ABOUT THE AUTHOR

Setu Mazumdar, MD, CFP® is board certified in EM and is the president of Financial Planner For Doctors.

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