J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

41.5 How To Claim the Keogh or SEP Deduction

Contributions made to your Keogh or SEP account as a self-employed person are deducted as an adjustment to gross income on Line 28 of Form 1040. A deduction for a contribution made for your benefit may not be part of a net operating loss.

Contributions for your employees are entered as deductions on Schedule C (or Schedule F) for purposes of computing profit or loss from your business. Trustees’ fees not provided for by contributions are deductible in addition to the maximum contribution deduction.

Deductible Keogh plan contributions may generally be made at any time up to the due date of your return, including any extension of time. However, the plan itself must be set up before the close of the taxable year for which the deduction is sought. If you miss the December 31 deadline for setting up a Keogh plan, you have at least up to April 15, 2013 to set up a SEP for 2012. If you have a filing extension, you have until the extended due date to set up a SEP and make your contribution.