Have Tax Questions? Ask a Tax Expert for Answers ASAP
A deduction in a prior year is allowed for contributions for to profit sharing plans if the contribution is made prior to the due date of the return including extensions.
"89 Rev. Rul. 55-310, 1955-1 C.B. 45. Both accrual method and cash method taxpayers have a grace period to make contributions for the taxable year. A payment is deemed made in the preceding taxable year if it is "on account of" such preceding year and it is made before the due date (including extensions) for filing the employer's federal income tax return for the year. Operationally, two requirements must be met for a payment to be treated as being on account of the preceding year: (1) the plan's terms must allow the payment to be treated as made for the preceding year; and (2) the employer eithe must designate the payment, in writing, to th plan administrator or trustee, as applying towar the previous year or must actually deduct the payment on it tax return for the previous year. Such designation, once made, is irrevocable."
The organization is still required to file a 990 which is due on May 15th without an extension, or August 15th with extension.