04 Sep My accountant made a mistake. Should I amend my return?

Q. I have made contributions to a SEP/SIMPLE plan as a self-employed business owner over the past many years. In some years my accountant deducted my contributions on my New Jersey return but in other years a different accountant did not. Is this an issue?
— Confused

A. Yes.

It’s time to find a tax preparer who can demonstrate an understanding of the state’s tax laws.

The law says that contributions to SEP IRAs and SIMPLE IRAs are always after-tax for New Jersey tax purposes, said Gail Rosen, a Martinsville-based certified public accountant.

“Therefore, if your previous accountant deducted these contributions on your prior years’ New Jersey tax returns, the tax law states that this return should be amended,” Rosen said.

You can learn more about how these accounts are taxed with the state’s Tax Tip Bulletin GIT-2, which can help with the calculation and offers a worksheet to help.

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This story was originally published on Sept. 4, 2020.

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