Author Topic: Filing taxes before all 2014 IRA contributions?  (Read 1846 times)

runjmc

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Filing taxes before all 2014 IRA contributions?
« on: January 29, 2015, 01:51:27 PM »
So, I'm relatively new to embracing the FIRE lifestyle and just got my IRA set up for 2014 not too long before the close of the year. As a result, I have $4500 left to contribute prior to the April 15th 2015 deadline for 2014 contributions. Finances are going to be a little tight if I have to do this paycheck-to-paycheck leading up to the deadline, but I'm expecting a $1750 federal return and $500 state return. Of course, these returns are based on me maxing out my IRA for 2014.

So. My question is this: can I file my taxes now, collect my refunds, and fund my IRA? Will the fact that I'm claiming I've paid $5500 towards my 2014 IRA cap but have only paid $1000 by the time I file raise an audit flag? Any advice from someone who has been in this situation would be greatly appreciated.

MDM

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Re: Filing taxes before all 2014 IRA contributions?
« Reply #1 on: March 22, 2015, 08:13:55 PM »
My question is this: can I file my taxes now, collect my refunds, and fund my IRA? Will the fact that I'm claiming I've paid $5500 towards my 2014 IRA cap but have only paid $1000 by the time I file raise an audit flag? Any advice from someone who has been in this situation would be greatly appreciated.
Short answer: yes.

For more details, see http://www.irs.gov/publications/p590a/ch01.html#en_US_2014_publink1000230424:
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When Can Contributions Be Made?

As soon as you open your traditional IRA, contributions can be made to it through your chosen sponsor (trustee or other administrator). Contributions must be in the form of money (cash, check, or money order). Property cannot be contributed.

Although property cannot be contributed, your IRA may invest in certain property. For example, your IRA may purchase shares of stock. For other restrictions on the use of funds in your IRA, see Prohibited Transactions , later in this chapter. You may be able to transfer or roll over certain property from one retirement plan to another. See the discussion of rollovers and other transfers later in this chapter under Can You Move Retirement Plan Assets .

You can make a contribution to your IRA by having your income tax refund (or a portion of your refund), if any, paid directly to your traditional IRA, Roth IRA, or SEP IRA. For details, see the instructions for your income tax return or Form 8888, Allocation of Refund (Including Savings Bond Purchases).

frugalnacho

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Re: Filing taxes before all 2014 IRA contributions?
« Reply #2 on: March 22, 2015, 08:51:34 PM »
I did it for last years taxes.  Did the taxes as if I made my contributions, then when my tax refund came I used that to make the contributions I already claimed I did.   I was under the impression that as long as it's in there before the dead line it's fine.