If you plan to make a 2007 contribution to your IRA, whether traditional or Roth, make sure the money is in the account by Tuesday.
Because the IRS accepts an April 15 postmark as evidence of timely filing, the question comes up every year as to whether the same rule applies to retirement account contributions. The answer is "no."
Your IRA contribution can be deposited into -- key word, deposited; not just en route to -- your IRA as late as the April 15 filing deadline and count toward the previous tax year.
Meeting this deadline is especially important If you are deducting a traditional IRA contribution. If you take the deduction on your 2007 return, but your deposit doesn't make it into the account until April 16, then it will show up as a 2008 contribution on reporting statements filed by your IRA account manager.
Since those tax documents go not only to you, but to the IRS as well, the tax agency will note the discrepancy. You can beat the IRS to the punch by filing an amended return and paying any tax savings that will be disallowed. But you'll eventually get a notice from the IRS noting penalty and interest charges that accrued in the meantime.
So if your IRA is at a local institution, head over there Monday or Tuesday and make your deposit. If you can make the deposit via online banking or by wiring the money, do so Monday just to be sure. And if you've got to mail it, use the U.S. Post Office's express mail or an overnight delivery service. It also wouldn't hurt to call your IRA manager and let the institution know that the money is on its way.
If you're younger than 50, you can put up to $4,000 into your IRA for 2007. Individuals age 50 or older are allowed an extra $1,000 catchup contribution.
For 2008 tax-year IRA contributions, the limits for both age groups is $1,000 more: $5,000 for individuals younger than 50; $6,000 for those age 50 or older.
There also are limits on deductibility of traditional IRA contributions. This story looks at the 2007 restrictions.
And Roth IRA contributions might be limited if you are a higher-income taxpayer. Details can be found in this story.