If you're ready to file your taxes but are scrounging for the cash to make a deductible IRA contribution, don't worry -- you can claim the deduction now and deposit the money later. The Internal Revenue Service gives you until the filing deadline, usually April 15, to make IRA contributions for the previous year. If you want to claim the deduction in January, for example, and use your refund to make the IRA contribution in April, just make sure you deposit the money on time.
Missing the Deadline
If you claim an IRA deduction and then find you don't have the money to cover the contribution, don't panic. As long as you amend your return and pay any taxes you owe by April 15, you won't face any penalties. You can file an amended return by filling out Form 1040X and mailing it in.
The IRS limits your IRA contributions to $5,500 per year, as of 2013, as long as you have that much in earned income. When you make an IRA contribution at tax time that you want to apply to the previous year, it's important to let your financial institution know to which year you want the contribution to count toward. Otherwise it is automatically credited to the current year.
The April 15 contribution deadline applies to both traditional IRAs and Roth IRAs; however, you normally don't report Roth IRA contributions on your taxes because you can't claim a deduction for them. Roth contributions come from after-tax dollars. If you plan to make only Roth contributions, the timing of your income tax filing doesn't matter.
If you plan to contribute all or part of your refund into an IRA, you can simplify things by setting up the IRA account in advance, and then have your refund directly deposited into the IRA. Keep in mind that if your refund is delayed beyond April 15 for any reason, you will have missed the contribution deadline.
- Creatas/Creatas/Getty Images