Which of the following is NOT a characteristic of a Keogh plan?

A Keogh plan, also known as an HR-10 plan, is a type of qualified retirement plan specifically designed for self-employed individuals and unincorporated businesses. These plans allow for significant tax-deferred savings for retirement.

When considering the characteristics of a Keogh plan, one key feature is that it must cover the employees of the owner if the plan is to be considered a qualified retirement plan. This means that if an employer establishes a Keogh plan, they would generally need to include their employees in the plan to meet the requirements for tax qualification. Therefore, stating that a Keogh plan need not cover the employees of the owner is incorrect.

The other options highlight valid characteristics of a Keogh plan. It is indeed utilized by self-employed individuals, it is classified as a qualified retirement plan allowing for certain tax benefits, and contributions to the plan can be made up to the due date of the individual’s Form 1040, encouraging timely retirement savings contributions. Thus, the notion that it need not cover employees is the correct choice for identifying a feature that does not align with the characteristics of a Keogh plan.