How Late Can I Contribute to My IRA for the Prior Year?
Understand the firm deadline for making a prior-year IRA contribution and the specific steps required to ensure it's applied to the correct tax year.
Making an Individual Retirement Arrangement (IRA) contribution is a common strategy for retirement planning and managing annual tax obligations. Understanding the final date to contribute for a previous tax year is a frequent question for savers.
The 2023 IRA Contribution Deadline
The deadline for making a contribution to a Traditional or Roth IRA for the 2023 tax year was the tax filing deadline, April 15, 2024. This date applies regardless of when you file your tax return, so even if you file in February, you have until April to contribute. If the filing deadline falls on a weekend or holiday, it shifts to the next business day.
Filing for an extension gives you more time to submit tax documents but does not extend the time to fund your IRA. The contribution deadline remained April 15, 2024, even with a filing extension. Missing this deadline means losing the opportunity to contribute for that tax year permanently, as the IRS does not provide waivers.
Making a Prior-Year Contribution
When making a contribution between January 1 and the tax filing deadline, you must designate it for the prior year, 2023. If you fail to do so, your financial institution will likely report it as a current-year (2024) contribution by default. This can lead to reporting issues and potential excess contribution penalties.
To apply your funds correctly, use your brokerage’s online portal to select the contribution year. If contributing by check, write “2023 IRA Contribution” in the memo line to provide clear instructions.
For the 2023 tax year, the maximum IRA contribution is $6,500. If you were age 50 or over in 2023, you could make an additional catch-up contribution of $1,000, for a total of $7,500. You can contribute up to this limit or your total taxable compensation for the year, whichever is less.
Deadlines for Other Retirement Plans
It is important not to confuse the IRA deadline with those for other retirement accounts, like Self-Employed Pension (SEP) IRAs and SIMPLE IRAs, which have more flexible rules. These plans are often used by small business owners and self-employed individuals.
The most significant difference is how extensions are treated. Unlike with Traditional and Roth IRAs, the deadline to contribute to a SEP IRA can be extended. If you file for a tax extension, your deadline to make a SEP IRA contribution for the prior year is also pushed to your extended filing date, which is typically October 15.