When can you invest in an IRA?

[alm0stk00l]

I was doing my taxes and playing with a few of the numbers; if I max an IRA for me and an IRA for my wife for last year, it will save use ~$1700 on taxes. However, I have not put any money away for that particular purpose so it means I would need to save $11,000 before April 15th. I think it is doable and I am going to give it a shot, but it will be difficult.

I know the rule is that you can invest into an IRA for last year up until a particular time, but I am unclear on if that time is April 15th or if it is when you file your taxes. What I would like to do is file my taxes and put in that I maxed the two IRAs. Then when the return comes in I could use that plus a little more to max the two IRAs. So, is it possible to put money into an IRA after you have already filed your taxes but before April 15th?

[Cheddar Stacker]

It's due 4/15, no extensions. Some other things like SEP IRA's can be paid when your extended return is due, but not T.I.R.A.'s.

Another thought though - If you reduce your tax withholdings today, you will have more net check to save by 4/15, then you can ramp up your withholdings after the refund comes in. Go to HR, fill out a new W-4, and write EXEMPT. They will withhold $0, but you have to make sure you make up for it later. Can you get any type of loan to bridge the gap? HELOC, family, 401K, employer loan, cash out some taxable investments??

You could also temporarily stop all 401K contributions, then catch up from May-December. This could have a very big impact, and since you will be writing EXEMPT on your W-4 your taxes won't increase either.

Also, based on the numbers you're in the 15% tax bracket. I think a T.I.R.A. is still worth it, but some would argue ROTH IRA would be better.

[Undecided]

I have not looked this year, but in the past, the instructions to the IRS contribution worksheet definitely said "made, or that will be made" by April 15th.

[alm0stk00l]

It's due 4/15, no extensions. Some other things like SEP IRA's can be paid when your extended return is due, but not T.I.R.A.'s.

Another thought though - If you reduce your tax withholdings today, you will have more net check to save by 4/15, then you can ramp up your withholdings after the refund comes in. Go to HR, fill out a new W-4, and write EXEMPT. They will withhold $0, but you have to make sure you make up for it later. Can you get any type of loan to bridge the gap? HELOC, family, 401K, employer loan, cash out some taxable investments??

You could also temporarily stop all 401K contributions, then catch up from May-December. This could have a very big impact, and since you will be writing EXEMPT on your W-4 your taxes won't increase either.

Also, based on the numbers you're in the 15% tax bracket. I think a T.I.R.A. is still worth it, but some would argue ROTH IRA would be better.

I went and got the W-4 form. It has the following at the bottom:

7 I claim exemption from withholding for 2013, and I certify that I meet both of the following conditions for exemption.

• Last year I had a right to a refund of all federal income tax withheld because I had no tax liability, and
• This year I expect a refund of all federal income tax withheld because I expect to have no tax liability.

   If you meet both conditions, write "Exempt" here. . . . . . . . . . . .

Under penalties of perjury, I declare that I have examined this certificate and, to the best of my knowledge and belief, it is true, correct, and complete.


I do not meet either of those criteria. Is it ok to put exempt for two months and then change it to something else? Or could there be some ramifications for not being truthful?

[Cheddar Stacker]

The other alternative is to put a ridiculous number like 27. People do it all the time. I've never heard of anyone getting in trouble for it. But....it is the IRS and they aren't always the most logical people/laws to deal with.

If you're feeling uncomfortable about it at all, just go with 4 or 5 and you can always defend your actions with "I was confused".