2025 SEP funding and two IRA corrections share an October 15 deadline

October 15 is the last date on which a client’s 2025 IRA year can still be changed, and the three transactions Sarah Brenner puts on it come from different corners of a practice: a SEP contribution for a business that has not yet funded one, an excess 2025 contribution that has to come out, and a 2025 contribution a client has decided against. Brenner, director of retirement education, writing for Ed Slott’s IRAHelp on September 28, opens with the fact that frames all three — the April 15 deadline for 2025 traditional and Roth IRA contributions is long past. What remains is repair work, plus the one contribution a business can still make.

Read the SEP item first, because nothing has gone wrong and no client is anxious about it: a business can establish and fund a SEP IRA for 2025 up to its tax-filing deadline, extensions included, and for some businesses that date is October 15, 2026. Which businesses fall into that group depends on the return rather than the plan — an owner who extended a 2025 business return may still have the window open, while one whose return went in earlier in the year is already past it. That makes the exercise a filter instead of a conversation: pull the business-owner clients whose 2025 returns are still open, and ask which of them want an employer contribution in a year that is otherwise finished. Since a client’s accountant may be tracking the same deadline separately, it is worth a call.

The second item carries a price: an excess contribution left in place draws a 6% penalty, and October 15 is the date on which that outcome stops being avoidable. Income that came in higher than projected is Brenner’s example, turning a Roth contribution the client already made in good faith into an ineligible one. The fix is a withdrawal of the excess plus the net income or loss attributable to it, completed before the deadline; because the amount leaving the account includes whatever that contribution earned or lost, the calculation is carried out at the custodian rather than as a flat reversal of the original check.

There is a second route to the same repair, and it is easy to assume it went away with the others: recharacterization of Roth conversions is long gone, as Brenner puts it, but recharacterization of tax-year contributions remains available, and it corrects an excess by moving the money into a different type of IRA instead of out of the retirement system. The date does not change — October 15, 2026 for 2025 contributions — and the distinction matters on the client’s balance sheet, since a recharacterization leaves the dollars inside a retirement account while a withdrawal returns them to the client and to the current year’s tax return.

That leads to the third item, which is a change of mind rather than a mistake: a client who put 2025 money into a Roth IRA and now thinks a traditional IRA fits better, or the reverse, has until the same date to recharacterize. The sharper version is the client who discovers the 2025 traditional contribution was not deductible and wishes it had never been made; October 15 is the deadline there too, and the remedy is identical.

What happens the next day is worth saying to a client in plain terms: for the nondeductible contribution, Brenner’s answer is that it has to remain in the IRA as a nondeductible contribution — not withdrawn, not refunded, simply carried in the account on terms the client did not choose. Advisors who have run a fall projection for a client whose income landed above plan know how a contribution that looked clean in the spring becomes a problem by autumn, and October 15 is the cheapest exit from it.

The SEP rule is written straight off the tax-filing deadline, extensions included, and the two correction items land on the day extended filers face. Brenner states the dates without tracing them back to the return; the better way to read the pattern is that the tax-filing deadline, with its extensions, is the reason all three deadlines hold October 15, rather than a rule to quote at a client. Either way, each item is a decision about 2025 that has to be made, documented and executed in the weeks before those fall filing dates pass.

This is the unglamorous half of the retirement-income work this publication has argued is the next advisory battleground. The spending plan, the claiming decision and the beneficiary terms are where a relationship is won over a decade; a contribution year still open, or an excess still removable, is where a dated amount of money is in play this month, and both belong on the same agenda for the same client meeting. The three items cut across client types, which is how they get missed. Two lists cover the ground: any client who made a 2025 IRA or Roth contribution and whose income finished above the projection, and any business client whose 2025 return is still open. October 15, 2026 is the date to put in front of both.