Make 2023 IRA Contributions by April 18

You probably know that maxing out your retirement plan contributions each year can earn you a significant deduction on your income tax return. So if you forgot to contribute the full allowable amount(s), you might be kicking yourself right now as tax filing season begins. Well, we have good news: Those of you with an IRA can still make tax-deductible contributions to your accounts!

Yes, the deadline for most qualified retirement plan contributions is December 31 of each year. But IRAs impose different rules. If you have a Roth or traditional IRA, you can contribute up to $6,000, or $7,000 if you’re over age 50 and making catch-up contributions, by the tax filing deadline of April 18.

You can deduct the full amount of your contributions from your annual taxable income, and that can add up to significant savings for you.

The rules work in a similar way with SEP and SIMPLE IRAs. If your employer participates in either of these types of retirement accounts, the deadline for making contributions is usually April 18. But some exceptions do occur, such as when your employer files for an extension, so double check with your human resources department.

The contribution limit for SEP IRAs is quite generous, at the lesser of 24 percent of your annual income or $61,000. SIMPLE IRAs allow tax-deductible contributions of up to $14,000 each year.

So if you want to maximize your potential income tax deductions, hurry and make IRA contributions before April 18. But do specify when making the contribution that you want it to be counted toward the 2022 tax year, so that there is no confusion. And call us if you have any questions about this, or any other retirement planning topic. We’re here to help!