SEP-IRA custodian refuses to record April 2023 contribution for 2022--how to handle so 2023 contribution is not excess? IRS rep said custodian is wrong but won't budge.

[lmarsha1]

I spent 30 minutes on the phone with the IRS who told me to point Fidelity to publication 560 - still they refuse to correctly record a contribution made by April 15 for previous year in SEP-IRA.

[JosephS1]

Regardless of what the custodian will or will not do, you can contribute to your SEP-IRA in 2023 for tax year 2022, as you are obviously aware.  I suggest you go ahead and in the retirement contributions section of TurboTax enter the amount as a 2023 contribution made for 2022.

You should document that you spoke to the IRS, they referred you to tell the Fidelity custodian about publication 560, and that the custodian refused.  The reasoning behind documenting the conversation - date, time, etc., if you can, is that if and when a notice from the IRS comes for overcontributing you can relay the documentation you have to alleviate any additional tax, interest, and penalty.  It also would be good if you can remember the name of the IRS representative you spoke to and the name of the Fidelity custodian you spoke with that refused what is allowed to be done.

Publication 560

@lmarsha1 

[dmertz]

Fidelity is doing exactly as the should and are correct not to modify your Form 5498.  The IRS requires that the SEP-IRA custodian record SEP contributions differently than regular personal IRA contributions.  The custodian is required to report SEP contributions as having been made in a particular year, not for a particular year.  It's your responsibility, not the custodian's responsibility, to track the year for which the SEP contribution was made and to report it correctly on your tax return.

SEP contributions must be entered into TurboTax in the business section.  They must not be entered anywhere under Deductions & Credtis.