Tax-Year 2015 Deadlines

pensionquote-tax-deadlinesDeadlines to install client’s plans for 2015 tax year

What you need to know

Information required from the client

  • For a proposal
  • For plan implementation

Completing a census form with the client [ Download ]

Key questions to ask clients while gathering census data

If you could make a tax deductible contribution to an IRS approved plan, what amount could you put away this year and for the next few years?

  • $100,000
  • $200,000
  • $250,000+

Inquire as to whether other current retirement plans are in place:

  • 401(k)
  • Profit sharing
  • Defined benefit/cash balance
  • SEP
  • Simple IRA

Key Details – Employee Census Information

Employee Census information should list all employees who received compensation at any time during 2015. The information needed for each person is as follows:

  1. Dates of Birth, hire and termination (if applicable)
  2. Projected Compensation for 2015 (including bonuses, commissions and overtime). Note that if compensation is paid evenly through the year, year-to-date compensation will be sufficient.
  3. Number of hours worked – this does not need to be exact – just indicate “less than 500”, “500 but less than 1000”, or “1000 or more.”
  4. Percent ownership of the business.
  5. Family relationship to any owner.
  6. Did employee earn more than $110,000 in 2012?
  7. Information On Current 401(k) / Profit Sharing Plan (if any)

a)    Plan document and amendments

b)   Most recent allocation report showing what each participant received in prior years.

NOTE: This information will be used to show the incremental cost of the new program. What percentage of the increased deductible cost of the new program is allocated to the key employees.

Information On Current SEP or SIMPLE Plan

If company maintains a SEP or SIMPLE, what contributions have been made in 2015 for 2015.


Who Does What?

  • Who do I call?
  • What role do I play?
  • What does the client need to do?
  • What is the CPA’s role?

Key Contacts

  • For Plan Designs/Proposals Inquiries
  • Insurance Inquiries
  • CPA Inquiries
  • Client Inquiries

Key Deadlines

October 1, 2015: For Plan sponsors who do not currently have a 401(k) Plan and have eligible Non-Highly Compensated Employees – This is the final date on which a new Safe Harbor 401(k) plan can be installed. The Safe Harbor allows all Highly Compensated Employees to contribute the maximum to the 401(k) even if the Non-Highly Compensated Employees do not contribute. If this deadline is missed, the maximum that the Highly Compensated Employees can contribute to a 401(k) will likely be reduced.

November 1, 2015: For Plan sponsors who currently maintain a SIMPLE – This is the deadline for informing employees that the SIMPLE will not continue in 2016. Plan sponsors who maintain a SIMPLE are not permitted to adopt another qualified plan in the same year. Thus, if a company wants to consider adopting a pension plan for 2016, they must notify participants by November 1, 2015 that the SIMPLE is terminating. Typically, a new 401(k) will be installed by January 1, 2016 so that the employees do no lose the ability to make salary deferrals.

December 1, 2015: For all plan sponsors who maintain a 401(k) plan and have eligible non-Highly Compensated Employees – This is the deadline for distributing Safe Harbor notices to employees in order to allow the Highly Compensated Employees to contribute the maximum 401(k) amount for 2016.

December 1, 2015: For Plan sponsors who do not currently have a 401(k) Plan and have eligible Non-Highly Compensated Employees. This is the last date on which a 401(k) plan can be adopted for 2015. Highly Compensated Employees will be able to contribute an average of 5% of compensation for 2015 if a plan is adopted after October 1 but on or before December 1.

December 23, 2015: Final date for submitting signed retainer agreements. We cannot guarantee that plan documents can be prepared by the end of year for new clients who submit retainer agreements after December 23.

December 31, 2015: Date by which all documents must be signed in order for contributions to be tax deductible for the 2015 calendar year.

Compensation Considerations

Includable Compensation for the Owner(s) is a critical aspect of the plan design. Generally for 2015, the optimum compensation is $265,000.  If includable compensation is less than the amount shown in the initial plan study, the net result will be a reduction in the permissible contribution for owners and an increase in the required contribution for staff.  The amount of compensation that can be included for pension purposes is dependent upon the type of business entity. The following is an overview:

Corporations (C and Sub S) Includable compensation is W2 total pay, including 401(k) and Section 125 deductions. Amounts paid as Subchapter S distributions CANNOT be included in compensation.

Sole Proprietorships Includable Compensation is Net Schedule C income reduced by deductible SE tax and further reduced by all pension and profit sharing contributions. Thus, if the retirement program contribution is $200,000 and the deductible SE tax is $15,000, the Net Schedule C income must be at least $470,000 in order to reach the optimal goal of $265,000 of includable compensation.

Partnerships: Includable compensation is calculated the same way for partnerships as it is for Sole Proprietorships. In order to have includable compensation of $265,000, the earned income on the K1 must equal $265,000 plus deductible self-employment tax plus total pension and profit sharing contributions.

LLP – Same as Partnerships

LLC – Generally the same as for partnerships but can follow the Corporation rules if the LLC elects to be taxed as a corporation.

About Us

We are pioneers in retirement planning, featuring tax-advantaged defined benefit pension plans as exit strategies for high net worth clients. We partner with top industry Advisers to bring their clients preferred solutions to achieve large income tax deductions.


Coral Gables, FL

Call Us

Phone: 1-800-717-4723

Working Hours

Monday-Friday: 9:00am – 5:00pm

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