Tax Accountant / Enrolled Agent · Houston, TX · Member since 2014 · 5k+ posts · 6k+ votes
1y
Contributions to SEP IRAs can be done after you file your taxes. The deadline is either April 15th without an extension or October 15th with an extension. But you don't have to wait with filing your taxes until you fund your SEP IRAs.
And not everybody can fund SEP IRAs. You need sufficient NET (after all expenses) self-employment income from something like contract (1099) work, being a Realtor, wholesaling and so on. Owning rental properties, including STRs, does not allow you to fund SEP IRAs.
Accountant · Phoenix, AZ · Member since 2025 · 14 posts · 5 votes
1y
Michael, you are absolutely correct. Thank you for expanding on this.
SEP IRA contributions can be made until the tax filing deadline, whichever yours may be, even if you have filed early. While you don't have to wait to file your taxes before funding your SEP IRA, making the contribution before ensures you accurately reflect it in your return and maximize your tax savings upfront. Also, it can avoid filing an amendment.
Another great point on eligibility- SEP IRAs require net self-employment income from activities like 1099 contract work, real estate sales, wholesaling, or other self-employment business income.
Passive income as you have highlighted, does not qualify. REPS can allow real estate investors to treat certain income as non-passive. However, SEP IRA contributions require earned income from active participation in a business or trade.
Our goal with posts like these are to increase awareness of all the options that may be available to them, like this one. While you may not qualify, it's crucial to know what exists so you can have informed discussion with your accountant. Many people miss out on things like this because they simply are not aware of these options. Since there are not many ways to reduce taxes retroactively for a previous year, understanding options like these can be particularly valuable at this time of year.