Have Tax Questions? Ask a Tax Expert for Answers ASAP
Unlike a standard IRA that allows contributions through and including April 15th, the simple IRA that you are covered by works more like a 401K. In fact, like you, my Professional Corporation covers me and our staff with what I am sure is a similar plan. I apologize, but there is no way to recharacterize these payments as being 2007 payments. Sorry, it's not how a Simple works.
I had a chance to review the IRS regs tonight and wanted to post my findings. First, as we both suspected, the employer match can be made as late as the deadline for the self-employed person's tax return. Here's that section. Although I have found support that you must make the employee portion by 1/1, let me look a little further before I close out this question. Here's the pertinent info on the employer under both a match and a salary reduction:
When must an employer make salary reduction contributions under a SIMPLE IRA plan?
The employer must make salary reduction contributions to the financial institution maintaining the SIMPLE IRA no later than the close of the 30-day period following the last day of the month in which amounts would otherwise have been payable to the employee in cash. The Department of Labor has indicated that most SIMPLE IRA plans are also subject to Title I of ERISA; also, under Department of Labor regulations at 29 CFR 2510.3-102, salary reduction contributions to these plans must be made to the SIMPLE IRA as of the earliest date on which the contributions can reasonably be segregated from the employer's general assets, but in no event later than the 30-day deadline described above. These rules also apply in the case of self-employed individuals. Thus, the latest day for the deposit of salary reduction contributions made on behalf of a self-employed individual for a calendar year is 30 days after the end of such year, which is January 30th.
When must an employer make matching and nonelective contributions under a SIMPLE IRA plan?
Matching and nonelective employer contributions must be made to the financial institution maintaining the SIMPLE IRA no later than the due date for filing the employer's income tax return, including extensions, for the taxable year that includes the last day of the calendar year for which the contributions are made.
You are sure you have the Simple, not a SEP-IRA, correct? If you have the same Simple I have, the latest possible deadline would be 1/30 for salary deferred contributions. Sorry. Qualified plans and SEP plans allow for tax return date contributions, but Simple's are earlier. See Publication 590 for more information: