The deadline for individual retirement account contributions is usually the same date your tax return is due. This is typically around April 15 each year. However, several holidays have changed the due date for IRA contributions, and your deadline for 2015 deposits depends on the state you live in.
Different due dates. For most people, IRA contributions for tax-year 2015 are due by April 18, 2016. The tax deadline was pushed back nationwide due to the Emancipation Day holiday in the District of Columbia. However, residents of Maine and Massachusetts have until April 19, 2016 to make 2015 IRA contributions due to the Patriots’ Day holiday celebrated in those states.
Under the wire. Delaying your deposit until the day the contribution is due could cause you to miss out on the tax break. For example, Fidelity will accept IRA contributions up until 11:59 p.m. on the day of the tax deadline for your state, assuming your contribution is received in good order. “It’s never a bad idea to make the contribution with at least a few days to spare in case there are any issues with the condition, unsigned check, blurry mobile check scan photo, etcetera,” says John Boroff, director of retirement product management at Fidelity Investments. Contributing a few weeks before the deadline gives you time to correct errors and make sure your deposit is processed correctly.
Different online contribution deadlines. Several IRA providers say they won’t be able to accept contributions online after April 18, but will accept IRA contributions from residents of Maine or Massachusetts that are postmarked or deposited in person by April 19. For example, a Vanguard representative says that contributions submitted after April 18 may not be eligible to be transacted online, but could be submitted by mail. And a spokesperson for Charles Schwab says they won’t be able to accept web contributions after April 18, but will process contributions in a Schwab branch or letters postmarked by April 19 that are contributed by eligible savers.
It’s common to wait. Many people make their IRA contributions in the months leading up to the deadline. Fidelity says almost half of IRA dollars for the 2014 tax year were contributed between January 1 and the April tax deadline. When you make the deposit, take care to note whether you want the contribution to be applied to the 2015 or 2016 tax year. IRA providers are allowed to automatically apply contributions to the calendar year in which they are received unless you specify otherwise.
Contributing earlier can prevent mistakes. “Don’t wait until the last day,” says Debra Greenberg, director of IRA product management at Merrill Lynch. “Mail goes lost, papers get mixed up in offices, it’s best to do it before so you can check to see if the check is deposited or if the e-file makes it there before the deadline.” Contributing earlier also gets the money compounding on your behalf sooner. “While we encourage saving to an IRA at any time of year, it’s also best to consider making contributions as early as possible in the tax year to benefit from investment growth of the contribution,” Boroff says.
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How to Meet the 2015 IRA Contribution Deadline originally appeared on usnews.com
