TurboTax Self-Employed. Every deduction found. Every dollar you deserve. Start today.

Funding Requirements for Defined Benefit Plans and Money-Purchase Plans

Generally, if your plan is a money purchase pension plan (a defined contribution plan can be either a money purchase plan plan or a profit-sharing plan) or a defined benefit plan, you must pay enough into the plan to satisfy the minimum funding standard for each  year.

Determining the required funding requirements for a defined benefit plan is an ongoing and expensive process. Actuaries must be hired to figure out the funding requirement each year.

Quarterly installments of required contributions:

If your plan is a defined benefit plan subject to the minimum funding requirements, you must make quarterly installments of the required contributions.

If you do not pay the full installments timely, you may have to pay interest on any underpayment for the period of the underpayment.

The due dates for installments are 15 days after the end of each quarter. For a calendar-year plan, the installments are  due April 15, July 15, October 15, and January 15 (of the following year) unless these dates fall on a weekend or holiday.

  • Securely import transactions from your bank, credit cards, PayPal, Square, and more.
  • Automatically sort transactions into tax categories to maximize your deductions.
  • Instantly see how your business is performing with profit and loss and expenses right on your dashboard.

Have an accounting or bookkeeping question? Email it to me.

Related Content