While it seems like 2023 has long passed us by, did you know that you can still contribute to your Individual Retirement Account (IRA) for the previous tax year if you haven’t filed your taxes yet? 

This presents a valuable opportunity to optimize your retirement savings and potentially reduce your tax liability.

The Internal Revenue Service (IRS) allows individuals to contribute to their IRAs for the previous tax year up until the tax-filing deadline, typically April 15. For the 2023 tax year, this means you have until April 15, 2024, to make contributions to your IRA and count them towards your 2023 contribution limit.

Contributing to your IRA prior to the tax-filing deadline can be advantageous for various reasons. First and foremost, it allows you to boost your retirement savings while taking advantage of the tax benefits associated with IRAs. Traditional IRA contributions are tax-deductible, potentially lowering your taxable income for the year in which you contribute. Roth IRA contributions, while not tax-deductible, offer tax-free withdrawals in retirement.

To contribute to your IRA for the 2023 tax year after the tax-filing deadline, follow these steps:

Assess your eligibility: Ensure that you meet the IRS eligibility criteria for contributing to an IRA. Factors such as age, income, and employment status may affect your ability to contribute.

Determine your contribution limit: The maximum contribution limit for IRAs in 2023 is $6,500 for those under age 50 and $7,500 for those 50 and older.

Make a contribution: Contact your financial institution or IRA custodian to make a contribution. Specify that the contribution is for the 2023 tax year.

Keep accurate records: Document your IRA contribution, and make sure to inform your tax preparer about the contribution when you file your taxes.

By taking advantage of this extension, you can maximize your retirement savings and potentially reduce your tax bill. It's a financial strategy that empowers you to plan for a more secure and comfortable retirement while making the most of the tax advantages offered by IRAs. 

One other tip: the IRS has raised the maximum contribution limits for 2024. The IRA contribution limits for 2024 are $7,000 for those under age 50, and $8,000 for those age 50 or older. Make sure to plan accordingly with your financial advisor this year to ensure you are taking full advantage of these increases!

Don't miss the opportunity to contribute to your future financial well-being! 

About Eric Berner:

Prior to working in financial services, Eric managed operations in the transportation and distribution industries. In these roles, he managed large employee populations and spent hundreds of hours with individuals facing wage garnishments, levies, income tax arrearages, and foreclosures. Eric’s experiences helping employees work through these issues, as well as a variety of personal tragedies, gave him an appreciation and understanding of the impact financial wellness has on individuals and their families during times of stress and suffering. Eric is one of the owners of Rock Castle Wealth Advisors and is a Certified Divorce Financial Advisor (CDFA).