There’s still time to make IRA contributions for the 2017 tax year!
The IRS allows us to make IRA contributions for a particular year up until the tax filing deadline of the following year (without extensions). This rule applies to both traditional IRAs and Roth IRAs, giving us some flexibility in terms of the timing of annual IRA contributions.
For 2017 IRA contributions, the deadline is April 17, 2018. The IRS allows us to save our earned income up to a maximum contribution limit of $5,500 in our traditional IRA or Roth IRA each tax year. For those age 50 and older, the contribution limit is $6,500. (The contribution limit does not apply to rollovers, transfers, and qualified reservist payments.)
Earned income or taxable compensation is required to make IRA contributions. Earned income is generally defined as income from wages, salaries, tips, or other taxable employee pay. It does not include interest or dividend income, retirement income, Social Security, or unemployment benefits.
The IRS gives married couples the ability for a spouse to contribute into his/her IRA even without income of their own, as long as the other spouse has enough earned income. This is called the spousal contribution.
Contributions to a traditional IRA end at age 70.5. Roth IRAs have no age limit for making contributions as long as we have earned income. We encourage you to speak with a CPA for guidance about your specific tax circumstance, such as the deductibility of traditional IRA contributions and/or the Roth IRA income limits.
Feel free to let us know if we can help in any way!