How do I correct my business's SIMPLE IRA distributions and contributions for 2018?

[cekesl]

My bookkeeper withheld and distributed SIMPLE IRA deductions according to the launched plan, and has made the required employer matching contributions, too. One employee elected to participate for 2018, me the owner.  

In preparing business taxes, we learned it was not documented properly and the business needs to correct 2018 Payroll Tax & related filings and my W2.  The business files Payroll and related taxes quarterly. How to best go about doing that?  If a quarterly re-filing solution, does it matter if the $12,500 SIMPLE IRA contribution exceeded my salary for any 2018 quarter?  $12,500 was contributed of my $28,000 salary.

[MarilynG · Accepted solution]

For Employee SIMPLE IRA contributions, the IRS info does not mention contributions required to be a % of salary; just a total for the year ($12,500 for 2018, plus $3,000 catch-up if eligible), and that deposits must be made within 30 days after each month.

For Self-Employed persons, deposits must be made by January 30th for the prior year. 

More info:

https://www.irs.gov/retirement-plans/simple-ira-plan-faqs-contributions

If your business issues you a Corrected W-2 and you applied for an Extension, you should still be able to report your contributions for 2018.

Click this IRS link with info on Correcting Plan Errors. 

[Edited 3/12/2020 | 6:31 PM]