Here's the situation:
S-Corp pays quarterly distributions. Some of the distribution amount goes directly to shareholders, some of the distribution goes into shareholders' SEP-IRA accounts.
The 1st through 3rd quarter distributions don't seem to be a problem as getting the check to the financial institution happens during the calendar year.
For the 4th quarter, exact amount of distribution won't be known until Dec. 31 -- making it impossible to get the checks to the financial institution in calendar year 2005.
Will the checks, received by the financial institution in early 2006, still count as 2005 SEP-IRA contributions (they will be generated on
12/31/05) even though the FI does not make the deposit until 2006?An alternative -- cutting checks to the FI early and then balancing against the distribution amount on 12/31 -- may be necessary. What type of journal entries would be needed for such a set of transactions? Normally, the distributions are generated as "stockholder payable".
Thanks in advance to all who respond with ideas and help.