Retirement and tax-savings deadline for Solo 401k: December 31

December 31st is the deadline for self-employed individuals and small businesses with no full-time employees to establish a Solo 401k. The business owner will then have up until the tax return is due in 2016 to make contributions up to $53,000 (or up $59,000 if the business owner is 50 or older). For example, consider the following scenario:

Don Ryan is self-employed as an IT consultant and his business type is a sole proprietorship. Don decides on December 22 that he wants to open a solo 401k in order to make contributions for this year. If Don signs the solo 401k adoption documents by December 31st, he can wait until April 15, 2016 (or October 15 if he files a timely extension) to both open the plan's bank/brokerage account and make his 2015 solo 401k contribution.

All contribution types can be made by the business tax return due date plus extension.

As described in (i.e., the publication covering the rules for Solo 401k plans and other owner-only retirement plans), both the employee and employer contributions can be made by the due date of the employer's return including extensions. See chart titled, "Key Retirement Plan Rules" on page 3 of Pub. 560. Also, see page 15 under heading titled "When Contributions Are Considered Made" which states the following:

You generally apply your plan contributions to the year in which you make them. But you can apply them to the previous year if all of the following requirements are met:

1. You make them by the due date of you tax return for the previous year (plus extensions).

1. The plan was established by the end of the previous year. 

The self-directed Solo 401k contribution deadlines depend on how the self-employed business is organized.

If the entity type is a Sole Proprietorship, the annual solo 401k contribution deadline is April 15, or October 15 if tax return extension is filed.

If the entity type is an LLC taxed as an S-Corporation, the annual solo 401k contribution deadline is March 15, or September 15 if tax return extension is filed.

If the entity type is an LLC taxed as a Partnership, the annual solo 401k contribution deadline is March 15, or September 15 if tax return extension is filed.

If the entity type is an LLC taxed as a Sole Proprietorship, the annual solo 401k contribution deadline is April 15, or October 15 if tax return extension is filed.

If the entity type is a Partnership, the annual solo 401k contribution deadline is March 15, or September 15 if tax return extension is filed.

If the entity type is an S or C-Corporation, the annual solo 401k contribution deadline is March 15, or September 15 if tax return extension is filed.

To learn about the solo 401k contribution limits as well as the rules for contributing to multiple retirement plans, .

Important Note: Don't confuse the Defined Benefit Plan contribution (DBP) rules with the solo 401k contribution rules. The DBP contribution rules require that contributions must be made in quarterly installments and due 15 days after the end of each quarter; however because a solo 401k plan falls under the Defined Contribution Plan umbrella, both the salary deferral and profit sharing contributions can be made up to the due date of the employer's tax return.

Click on Solo 401k Deadlines to learn about other important solo 401k deadlines.