TaxMonkey wrote:And what brought this to your attention in Dec of 2018?
New tax client and I found that out when I was reviewing his past year tax returns.
How do you tell the difference between a 2015 contribution made in March of 2016, and a 2016 contribution made in March of 2016?
The contribution amount should also match his self-employed income.
For example, taxpayer's 2015 total business profit was $30,000 and his SEP-IRA contribution was $4,300. He made the contribution in March 2016. He claimed it in his 2016 tax return instead of 2015.
I understand it should be fine if he had enough business profit in 2016 to absorb the $4,300 contribution which was supposed for year 2015. But what about if his business income in 2016 decreased and the $4,300 exceeded the maximum contribution amount?