Form 5305 or 5304 can be used to establish a Simple. You must have signed this form to adopt the plan before 10/1/02 to be effective for year 2002. The form does not get filed with the IRS. You retain it for your records.



If you report your income on Schedule C, there are several custodians (mutual fund families and brokerage houses) that will accept your 2002 contributions as late as the filing of your return, including extensions. This means you can extend to 10/15/2003, if necessary, to raise the $ for the contribution.

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Replying to:

I will have roughly $7500 in moonlighting income for 2002 (paid as an independent contractor). I was considering opening a Simple IRA and contributing the portion that cannot be deductde for work-related expenses. Is there still an Oct 1 deadline for establishing this account? I could not find any mention of this on the IRS website. Also, must these contributions be made through a salary reduction agreement, or can I decide later in the year to contribute money that has already been paid to me?

Zip Code: BWeinstein@mdtaxes.com