Questions About Deadlines for Contributing to Previous Tax Year’s IRA
You’re allowed to make contributions to your IRA account for the previous year up until the tax deadline. So, for this year, you can make contributions to your 2006 IRA up until April 17th. I, in fact did this very thing a few weeks ago.
However, I was reading Blueprint yesterday, and he said you must make your contribution before you file your taxes. This could be a problem for me since I filed my taxes in February, and opened up my account in March.
I read a few of the comments, and No Credit Needed and The Happy Capitalist seemed to think it didn’t matter if you had filed before you made the contribution. I talked to my accounting teacher last night (who is a CPA), and she said it’s probably OK, but not the best way to do it. She said, in other words, “You’ll probably get away with it.” Not exactly reassuring.
Does anybody know for sure out there? I could understand if this was a traditional IRA account and I was deducting the contributions, but I opened a ROTH IRA with after tax dollars, so there is no deduction and, thus, nothing to report to the IRS. Right???
Posted on Friday, March 23, 2007 @ 9:32 am by BudgetFreak
Filed Under: Taxes , Retirement
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on 24 Mar 2007 at 6:33 am 1.thc said …
BudgetFreak: It’s pretty darn confusing and there’s a lot of conflicting information out there. The truth is that you do have until filing deadline (not including extensions) to make IRA contributions. Just be sure that your contribution matches what you put on your return. I am a Certified Financial Planner(TM) and I make my living giving this kind of advice.
on 24 Mar 2007 at 6:58 am 2.thc said …
This is taken directly from IRS Pub. 590:
Contributions must be made by due date. Contributions can be made to your traditional IRA for a year at any time during the year or by the due date for filing your return for that year, not including extensions. For most people, this means that contributions for 2006 must be made by April 17, 2007, and contributions for 2007 must be made by April 15, 2008.
Note: It does’t say a thing about when you actually file your return.
(BTW–Thank’s for the link!)
on 25 Mar 2007 at 6:33 pm 3.helpful said …
Of course, I am not a professional so take all of this with a grain of salt.
Line 32 of form 1040 is the only place I am aware of that an IRA contribution would even matter on a tax return. This relates to deductions for contributing to a traditional IRA. You contributed to a ROTH IRA and you would not qualify for any deduction anyway.
I do not think your contribution would have made any difference to your return. If you are worried, have someone look it over. You can always amend the return later.
I would also encourage you to keep good records regarding exactly how much you contribute to your ROTH. If you need to make a withdrawal, you want to be sure you can prove that there would be no penalties or taxes due.