When Do IRA Contributions Have to Be Made?
Understand IRA contribution timing that extends beyond the calendar year. Learn the key deadlines for different IRAs to ensure your retirement savings are counted.
Making an annual Individual Retirement Arrangement (IRA) contribution is a strategy for building long-term savings, as these accounts offer tax advantages that can accelerate growth. The Internal Revenue Service (IRS) sets specific deadlines for when funds must be deposited for a given tax year. Understanding these timelines ensures your savings are credited correctly and that you receive any applicable tax deductions.
The General Deadline for Traditional and Roth IRAs
The deadline to contribute to a Traditional or Roth IRA for a specific tax year is the same as the due date for your federal income tax return, which is April 15. This grace period allows individuals to assess their final financial picture for the year before committing funds. If the tax filing deadline falls on a weekend or a holiday, the IRA contribution deadline shifts to the next business day.
From January 1 until the April tax deadline, you can make a “prior-year contribution.” For instance, you can contribute to your IRA for the 2024 tax year anytime between January 1, 2024, and April 15, 2025. This allows you to make a lump-sum contribution with your tax refund or after you have a clear understanding of your taxable income for the previous year.
Filing for an extension to file your tax return does not grant you more time to contribute to a Traditional or Roth IRA. The contribution deadline remains fixed at the original tax filing due date, regardless of whether you file your return in April or October. Missing this date means you forfeit the chance to contribute for that tax year.
Contribution Deadlines for SEP and SIMPLE IRAs
The contribution timing for Simplified Employee Pension (SEP) IRAs and Savings Incentive Match Plan for Employees (SIMPLE) IRAs differs from Traditional and Roth accounts. The deadline for employer contributions to these plans is tied to the business’s tax return due date, including any filing extensions. For a self-employed individual, this means if they file for an extension to October 15, they have until that extended date to fund their SEP IRA for the previous tax year.
SIMPLE IRAs have a dual-deadline structure that separates employee and employer contributions. Employee salary deferrals must be deposited by the employer within 30 days of the end of the month in which the money was withheld. The employer’s own contributions, whether matching or non-elective, follow the same rule as SEP IRAs and can be made up until the employer’s tax filing deadline, including extensions.
How to Ensure Your Contribution is Timely
For individuals who mail a physical check, the IRS follows the “postmark rule.” This means your contribution is considered on time if the envelope is postmarked on or before the tax deadline. It is advisable to keep a copy of the postmarked envelope as proof of timely mailing for your records.
For electronic contributions, the transaction must be fully processed by the deadline. It is important to check with your financial institution for their specific cutoff time on the deadline day, as these times can be earlier than midnight. Initiating electronic transfers a few business days before the deadline can prevent unforeseen processing delays.
When making a contribution between January 1 and the tax filing deadline, you must tell your IRA custodian which year the contribution is for. If the funds are for the prior year, you must explicitly designate it as such (e.g., “2024 Contribution”). Without this instruction, the custodian will likely assume the contribution is for the current year, which could lead to incorrect tax reporting.