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The thread on "best time to open an IRA" got me thinking...I just need a little clarification...


The "All About IRA's" article says:
And remember that Roth IRA contributions for a tax year must be made no later than the due date of your tax return, not including extensions.


What if you file your taxes before April 15th? Does this mean your contributions for the previous year must be made by the time you file or is it still by April 15?

Also, can you open an IRA before April 15 or just contribute to an existing one? That is, say I do not have the money to open an IRA open right now but I will by April. Can I wait until April to open a 2000 IRA account somewhere or must the account have been opened in 2000 in order to earmark contributions for 2000 in the first few months of 2001?

I am I asking that clearly?
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What if you file your taxes before April 15th? Does this mean your contributions for the previous year must be made by the time you file or is it still by April 15?

Also, can you open an IRA before April 15 or just contribute to an existing one? That is, say I do not have the money to open an IRA open right now but I will by April. Can I wait until April to open a 2000 IRA account somewhere or must the account have been opened in 2000 in order to earmark contributions for 2000 in the first few months of 2001?


You can both open and fund a Roth IRA for year 2000 any time between 1/1/2000 and 4/16/2001 (4/15/20001 is a Sunday).

TMF ExRO
Phil Marti
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Author: sjfans Date: 9/30/00 12:06 AM Number: 25196
What if you file your taxes before April 15th? Does this mean your contributions for the previous year must be made by the time you file or is it still by April 15?

I think if you file your tax return early (prior to April 15), and after that decide to fund your IRA for the previous year (also before April 15), you need to file an amended tax return to show that contribution.

-rkm

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You can both open and fund a Roth IRA for year 2000 any time between 1/1/2000 and 4/16/2001 (4/15/20001 is a Sunday).

TMF ExRO
Phil Marti



Thanks. The reason I ask is this: I might have trouble coming up with enough cash to start a Roth IRA by the end of the year. I could do it but I'm trying to pay off the last of some credit card debt and put a little in the old emergency fund first. But I hate to miss out on a year of contributions if possible.

We (DH and I) are expecting a bit of a federal tax refund this year - probably about $1500. I know, I know, we should adjust our withholdings instead of giving Uncle Sam a tax free loan but this is the first year we get to itemize and take advantage of some deductions and, well, we just left it alone and knew we'd be getting some back.

So, if I fill out my return and file electronically really early like I have the past couple of years I might get my refund before April 15th. So with that amount and whatever I can save up between now and then I could have a significant contribution to start 2 Roth's, one for me and one for DH.

Are there any problems with doing this? (Besides hoping the refund check comes early?)

rkmacdonald wrote:
I think if you file your tax return early (prior to April 15), and after that decide to fund your IRA for the previous year (also before April 15), you need to file an amended tax return to show that contribution.


Does this apply in the case of a Roth? I thought since Roth cotributions are after tax, they don't have any implications on an income tax return...


Thanks for the help...
sjfans
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So, if I fill out my return and file electronically really early like I have the past couple of years I might get my refund before April 15th. So with that amount and whatever I can save up between now and then I could have a significant contribution to start 2 Roth's, one for me and one for DH.

Are there any problems with doing this? (Besides hoping the refund check comes early?)


None. Since Roth IRA contributions are not reported on your return, you won't even have to worry about that.

People planning to make traditional IRA contributions for the prior year, which are reported on the return for that year, who file early can go ahead and prepare the return showing the contribution, even though it hasn't yet been made. If it doesn't get made, they have to amend the return.

TMF ExRO
Phil Marti
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Author: sjfans Date: 10/1/00 8:59 PM Number: 25213

I wrote:
<<I think if you file your tax return early (prior to April 15), and after that decide to fund your IRA for the previous year (also before April 15), you need to file an amended tax return to show that contribution.>>

You replied:
Does this apply in the case of a Roth? I thought since Roth cotributions are after tax, they don't have any implications on an income tax return...

You are right. I was thinking of a traditional IRA. I don't think there is any reporting requirement for a Roth on you income tax return.

-rkm

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I opened my 1999 IRA on April 12th, as I realized the tax bite the sale of a (non-owner occupied) house was going to be. You can cut it close, but you need to ensure your financial institution is in tune with your needs (In retrospect I think I should have opened it in the fall of 1999, even if only with a couple hundred bucks......it would have saved a bit of "sweating it out" between about April 5th and April 12th....).
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