You know April 15 is the deadline for filing your taxes. And you’ve probably been very focused on making that deadline. But in all that rush to submit your paperwork, have you remembered to mail in that IRA contribution check? Don’t forget: The same April deadline applies for making that retirement contribution.
As U.S. News & World Reports notes, you have until April 15, 2013, to make a contribution to your IRA if you’d like to apply your deposit to tax year 2012. This applies to both traditional IRAs and to Roth IRAs, U.S. News explains.
As for how much you may contribute, it’s the same for both a traditional IRA and a Roth IRA – up to $5,000 if you’re under 50, and up to $6,000 if you were age 50 or older last year, according to the IRS. For tax year 2013, that limit will increase to $5,500 and $6,500, respectively.
Note however that only a deposit to a traditional IRA will allow you to deduct your contribution from your 2012 income – a Roth IRA contribution is not tax deductible. Upon retirement, though, you’d owe taxes on your traditional IRA withdrawal but would owe nothing on a withdrawal from your Roth IRA.
Regarding traditional IRA contributions, the IRS notes, “Your deduction may be limited if you (or your spouse, if you are married) are covered by a retirement plan at work and your income exceeds certain levels.”
If you’re debating whether to go the traditional IRA route or the Roth IRA route, you should check out our recent post, Tax Considerations to Keep in Mind When Contributing to Your IRA or 401(k).
Whichever IRA you go with and however much you contribute, just remember: Make sure the holder of your IRA knows you’re contributing to tax year 2012. “If you don’t specify a year, the IRA sponsor may report to the IRS that the contribution is for the calendar year in which the payment was received,” warns U.S. News.
Finally, if you’re mailing your contribution, make sure the envelope is postmarked by April 15, 2013.
How are you funding your retirement? Have you made your contribution for tax year 2012?