What Is the Last Day for an IRA Contribution?
Understand the final date for making a prior-year IRA contribution and the necessary steps to ensure it is correctly applied for the intended tax year.
Individual Retirement Arrangements (IRAs) are a common tool for building retirement savings, offering valuable tax advantages. Many savers focus on how much they can contribute each year, but it is equally important to understand when those contributions must be made. The deadline for making an IRA contribution is a frequent source of confusion, leading many to miss the opportunity to save for the previous tax year. This guide provides a clear explanation of the dates and rules governing IRA contributions to help you navigate the process.
The General Contribution Deadline
The deadline for making contributions to a Traditional or Roth IRA for a specific tax year is not December 31st of that year. Instead, you have until the federal tax filing deadline of the following year to make your contribution. For example, to make an IRA contribution for the 2024 tax year, you have until April 15, 2025, to deposit the funds into your account.
This deadline aligns with the due date for filing your Form 1040. If the tax filing deadline falls on a weekend or a holiday, the deadline is pushed to the next business day. This can occur due to federal holidays or observances like Emancipation Day in Washington D.C., which can shift the national tax filing date.
For the 2024 tax year, the maximum amount you can contribute to all of your Traditional and Roth IRAs is $7,000 if you are under age 50. If you are age 50 or over, you can make an additional “catch-up” contribution of $1,000, bringing your total limit to $8,000. These limits apply to your combined contributions, meaning you cannot contribute the maximum amount to both a Traditional and a Roth IRA in the same year.
Specifying the Contribution Year
Simply transferring money into your IRA before the deadline is insufficient; you must communicate to the IRA custodian which tax year the contribution is for. When making a contribution between January 1 and the tax filing deadline, it could be applied to either the current calendar year or the prior tax year. Without explicit instructions, the custodian may apply the funds to the current year, which could cause you to miss the prior-year contribution window.
To prevent this error, take action to designate the contribution year. If you are mailing a check, write the specific tax year (e.g., “2024 IRA Contribution”) in the memo line. When making an electronic transfer through your custodian’s website, there will be a dropdown menu or a checkbox allowing you to select the appropriate year.
Failing to properly designate the year can lead to complications. For instance, if you intended to make a 2024 contribution in March 2025 but it was mistakenly applied to 2025, you would have lost the chance to use your 2024 contribution space. This could also lead to an excess contribution if you later try to make a full 2025 contribution, potentially triggering a 6% penalty tax on the excess amount for each year it remains in the account.
Deadlines for Other Retirement Plans
While Traditional and Roth IRAs share the same contribution deadline, other types of retirement plans operate under different schedules. For small business owners and self-employed individuals, Simplified Employee Pension (SEP) IRAs and Savings Incentive Match Plan for Employees (SIMPLE) IRAs have deadlines that can extend beyond the personal tax filing date. Employer contributions to these plans are due by the employer’s business tax return deadline, including any extensions.
This means a business that files for an extension has until that later date, often in September or October, to make employer contributions for the prior year. With SIMPLE IRAs, there is an additional rule for employee contributions: employers must deposit salary reduction contributions within 30 days of the end of the month in which the money was withheld. These distinctions are important for business owners managing retirement funds.
Rollover contributions operate on a completely different timeline and are not subject to the annual contribution deadline. When you move funds from one retirement account to another, such as from a 401(k) to an IRA, you have 60 days from the date you receive the funds to deposit them into the new account to avoid taxes and penalties. This 60-day rule is a separate regulation from the annual contribution limits.
Impact of Tax Filing Extensions
A common point of confusion is whether a personal tax filing extension also extends the IRA contribution deadline. Filing Form 4868 grants an automatic six-month extension to file your tax return. However, this extension does not grant you more time to fund your Traditional or Roth IRA for the previous year.
The deadline to make your IRA contribution remains the original tax filing day, typically April 15, regardless of whether you have filed for an extension. If you file an extension and wait until after the April deadline to send money to your IRA for the prior year, the contribution will be disallowed for that year and likely treated as a contribution for the current year.