Have you made your IRA contributions for the year? There is still time. Here are 4 rules you want to be aware of when making your contributions.
File First and Fund Later
Would making an IRA contribution help your tax picture? You can claim a deduction for your 2023 IRA contribution now as you file your taxes. And fund it later. Some people even fund their IRA contribution with their tax refund if the timing is right. Just don’t wait too long. If you claim the contribution, be sure you get it done by the deadline. (See #4 below.)
No Age Limits For IRA Contributions
At one time you couldn’t make an IRA contribution once you reached 70 ½. The SECURE Act removed this restriction. If you have earned income, you can make a traditional IRA contribution regardless of your age. There was never an age restriction for contributing to a Roth IRA.
Spousal Contributions May Help Your Financial Picture
If a spouse does not work outside of the house, they could be eligible to make a deductible IRA contribution. It depends on the circumstances of the working spouse*
- If the working spouse is not covered by a plan at work, a contribution made for the stay-at-home spouse is fully deductible.
- If the working spouse is covered by a plan at work and
- Your Adjusted Gross Income is less than $218,000, the contribution for the stay-at-home spouse is fully deductible.
- Your Adjusted Gross Income is over $218,000 but less than $228,000, the contribution is partially deductible
You can still build your retirement savings as a stay-at-home spouse.
*The Adjusted Gross Income limits are increased annually. Look at 2023 IRA Deduction Limits
No Extensions For IRA Contributions
While you can file an extension for more time to file your taxes. You don’t get an extension for making your IRA contribution. The deadline for funding your traditional or Roth IRA is April 15, 2024.