Tax Tip: Make Your IRA Contribution on Time

Editor’s Note: This article is part of our 2012 Tax Tips series. Robert Flach is an expert with almost 40 years of experience as a tax professional and also blogs as The Wandering Tax Pro.

NEW YORK (MainStreet) -- Today is April 16 – but it is not “Tax Day.”

Because Washington, D.C. celebrates Emancipation Day today, the IRS extended the deadline for filing your 2011 income tax return to April 17, and the states have gone along.

Tuesday is not just the deadline for filing your tax return and paying your taxes – it is also the deadline for making a traditional or Roth IRA contribution. You can submit a Form 4868 to extend the time to file your tax return, but you cannot extend the time to make your 2011 IRA contribution.

You can extend the time to make a 2011 contribution to most self-employed pension plans, like a SEP, by filing for an extension. But it is not so for the basic IRA.

So if you claimed a deduction for a contribution to an IRA on your 2011 Form 1040, you better make sure your contribution is in the account by Tuesday.

It is important when depositing money to your IRA that you identify the tax year for which the contribution is being made – on the check and any accompanying payment voucher or coupon.  When you receive your account statement, check to see the payment has been applied to the correct year.

Your IRA trustee sends the IRS a record of your contribution – if it is applied to the wrong year you might get a balance due notice from Uncle Sam down the road.