Make a 2015 Contribution to An IRA Before Time Runs Out
Tax-advantaged retirement plans allow your money to grow tax-deferred â€” or, in the case of Roth accounts, tax-free. But annual contributions are limited by tax law, and any unused limit canâ€™t be carried forward to make larger contributions in future years. So itâ€™s a good idea to use up as much of your annual limits as possible. Have you maxed out your 2015 limits?
April 18 Deadline
While itâ€™s too late to add to your 2015 401(k) contributions, thereâ€™s still time to make 2015 IRA contributions. The deadline is April 18, 2016. The limit for total contributions to all IRAs generally is $5,500 ($6,500 if you were age 50 or older on Dec. 31, 2015).
A traditional IRA contribution also might provide some savings on your 2015 tax bill. If you and your spouse donâ€™t participate in an employer-sponsored plan such as a 401(k) â€” or you do but your income doesnâ€™t exceed certain limits â€” your traditional IRA contribution is fully deductible on your 2015 tax return.
Evaluate Your Options
If you donâ€™t qualify for a deductible traditional IRA contribution, see if you qualify to make a Roth IRA contribution. If you exceed the applicable income-based limits, a nondeductible traditional IRA contribution may even make sense. Neither of these options will reduce your 2015 tax liability, but they still provide valuable opportunities for tax-deferred or tax-free growth.