IRA and Tax Year

[mvenus929]

This is probably a really simplistic question for most of you, but I'm new to all this. First off, I'm a second year peds resident. I started making contributions to my Roth IRA in April of last year, when I had finally managed to fully fund my emergency fund. I set it up for automatic deductions every month at an amount that would give me the maximum contribution in a year. However, because I started late, I am about $1400 short of the $5500 maximum for 2015.

I understand that contributions can continue to be made through April 18, 2016 for the 2015 tax year, so I will reach the maximum. I don't understand how this gets factored into my tax return, given that I'm trying to file it in February and not April. The 5498 my bank sent me is through the end of 2015, with a note saying that if I make additional contributions by April 18th, I'll be sent a new one in May. If I finish funding for 2015 prior to filing my tax return, and then fully fund my 2016 IRA before Dec 31*, will all of the contributions be listed for 2016 tax year? Or will it only show contributions after April 18th, even if some of the contributions are intended for the 2016 year? When filing my taxes, do I just anticipate how much I am going to contribute if I haven't contributed it all yet?

 

*I am going to hold my Roth IRA contributions in 2017 for many reasons, including the fact that I need to save up for my board exams, licensing fees, potential moving expenses, etc, and am not sure I will be eligible to contribute with a rise in salary.

[jfoxcpacfp]

Glad you asked - there are probably others out there with the same question.

Any contributions that you designate for 2015 will be counted for 2015, even if you file your return before finishing them up. If, for some reason, you don't contribute the full $5,500 for 2015, you don't report them on your tax return (unless you get the retirement saver credit) so no need to amend unless there is some state- or local-specific reason. Even if you begin contributing for 2016 before you finish out 2015, it's no problem. Just be sure to let your custodian know which year your contributions apply to and they should get it all straightened out.

BTW - you also have until 4/18/16 to finish out your HSA for 2015, if applicable.

[scbunker]

Remember Roth contributions aren't tax deductible, so you don't actually report them on tax return. Therefore doesn't matter when you file.

Between Jan1 and April 16, custodian should ask you which year the contribution is for when you make a deposit.

On a related note, you also have until April 16 to contribute to 2015 HSA. HSA contributions, however, are deductible and are reported on your return (above-the-line!), so that timing is important. Either finish 2015 contributions before filing or you'll have to file an amended return if you want the deduction.

[spiritrider]

Contributions to traditional IRA accounts and HSA accounts are also not dependent on timing. The amount contributed must match, but in both cases the contribution can be after the filing. They just have to be made by the tax filing deadline.

 

[scbunker]

Are you suggesting you can say you've contributed to your HSA on your 1040, when you actually haven't yet, but plan to before the deadline?

Is that common practice? Seems risky to me. If something happens and you can't/don't, you then file amended return?

[jfoxcpacfp]

NotADoc wrote:

Are you suggesting you can say you’ve contributed to your HSA on your 1040, when you actually haven’t yet, but plan to before the deadline?

Is that common practice? Seems risky to me. If something happens and you can’t/don’t, you then file amended return?

Click to expand...

Yes, you can, and it's common practice. The IRS does not get the date of contributions, just that it was made for the year. Simple to amend. BTW, the deadline this year is 4/18.