There’s no worse feeling than that lingering voice in your head telling you forgot to do something. If that voice is telling you that you forgot to contribute to your IRA, you are in luck.
Financially, many of us associate April with taxes – but we should also understand what can be done after the turn of the calendar, specifically with important IRA deadlines.
The deadline to take your Required Minimum Distribution (RMD) from your Traditional IRA is December 31st of that specific tax year. Unless it is your first RMD, you have until April 1st of the year after you turn 72. So, if you turned 72 in 2021 you have until April 1st, 2022 to take your first RMD. After that, it’s December 31st of that specific year.
However, the deadline to contribute is different. Some people may not realize when they can make their IRA contribution. You can make a yearly IRA contribution between January 1 of the current year and April 15 of the next year. Accordingly, you can make your IRA contribution for 2020 any time from January 1, 2020 to April 15, 2021.
Thanks to the SECURE Act, traditional IRA owners can now contribute to their IRAs past age 72 if they have taxable income.
If you are making a 2020 IRA contribution in early 2021, you must tell the investment company hosting the IRA account for which year you are contributing. If you fail to indicate the tax year that the contribution applies to, the custodian firm may make a default assumption that the contribution is for the current year and report the to the I.R.S.
So, write “2021 IRA contribution” or “2020 IRA contribution,” as applicable, in the memo area of your check. Be sure to write your account number on the check. If you make your contribution electronically, double-check that these details are communicated.