Author Topic: Maxing out an IRA using Tax year or Calendar year?  (Read 1777 times)

Hall11235

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Maxing out an IRA using Tax year or Calendar year?
« on: August 11, 2015, 04:51:07 PM »
Hey folks,
When maxing out an IRA, I know that the end of allowable contributions for 2015 is April 2016. But, if I max it out by December of 2015, will my contributions in the beginning of January count for 2015 or 2016? I don't want to pay a penalty tax.

Thanks all!

Hall11235

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Re: Maxing out an IRA using Tax year or Calendar year?
« Reply #1 on: August 11, 2015, 04:59:45 PM »
Sorry to ask but, when do you do this? At the change of the calendar year or during tax season? I have never had an IRA before and have actually only done taxes once  (just turned 22). I should've done them for the last three years but my mom refuses to let me go as a dependent (apparently you get a good tax credit for having kids?)...

Hall11235

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Re: Maxing out an IRA using Tax year or Calendar year?
« Reply #2 on: August 12, 2015, 06:04:08 AM »
Thanks, Serpentstooth! Great Information and super helpful.

2Birds1Stone

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Re: Maxing out an IRA using Tax year or Calendar year?
« Reply #3 on: August 12, 2015, 06:10:49 AM »
I would always put the money in for a given year as soon as possible. Time in the market > timing the market.

teen persuasion

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Re: Maxing out an IRA using Tax year or Calendar year?
« Reply #4 on: August 12, 2015, 06:26:17 AM »
Sorry to ask but, when do you do this? At the change of the calendar year or during tax season? I have never had an IRA before and have actually only done taxes once  (just turned 22). I should've done them for the last three years but my mom refuses to let me go as a dependent (apparently you get a good tax credit for having kids?)...

You can file a return even if you are a dependent.  I walked my kids thru filing at age 15 after they got their first jobs.  You simply cannot take your personal exemption (approximately $4k depending on tax year) IF you are not a dependent.  You do still get your standard deduction, most likely Single for you (approximately $6k depending on tax year).  Those amounts are subtracted from your income to arrive at your taxable income; other figures may adjust things, but those are the biggies.