Most of us are well aware that not only are our federal tax returns due on April 15 every year, but that is also the deadline for contributions to be made in our individual retirement accounts for that tax-filing year. However, this year, these deadlines have been extended.
The deadline for filing 2015 individual tax returns has been extended to April 18. Why? Because Emancipation Day, a notable government holiday, is being celebrated on April 15 since its typical day of honor falls on April 16 this year—which is a Saturday.
This gives the average person a bit of wiggle room for tax filing. It also gives those planning to open new individual retirement accounts and/or to make contributions to their accounts a few more days to do so. In most states, this deadline has also been moved to April 18, although, if you live in Maine or Massachusetts, you have until April 19, thanks to Patriots Day—celebrated in those states this year on April 18.
All things considered—this only gives you a few extra days (that fall over the weekend, mind you) to get your affairs in order. So, we strongly advise that you not procrastinate, especially if you are considering opening a new retirement account.
Regarding retirement accounts—this time of year Advanta IRA finds many individuals either rushing to establish new accounts or hurrying to make last-minute contributions to existing plans. The reason is this: those wishing to open new traditional IRAs or Roth IRAs can do so up to the April deadline—and can apply any contributions made before that date to the previous year’s (2015) income tax returns. You can even deposit the maximum yearly contribution limit of $5,500 (plus $1,000 more if you’re 50 or older). In addition to that, you can also max out the new year’s (2016) contribution limit at that time, which can establish more funds to immediately invest. For those who have established accounts but haven’t made ample contributions over the past year, you can make a contribution (up to the yearly limit above) and receive the same benefits on your tax return at the time of filing for 2015.
It is important for us to reiterate that the contribution limits of $5,500 per year (including the $1,000 catch-up amount if you are 50 or older) cannot be exceeded. You can only contribute amounts up to those limits that are allowed each year.
Bear in mind that this April 18 deadline for opening a new retirement account applies to traditional and Roth IRAs only. For SEP and SIMPLE IRAs, the deadline for contributions is the business filing due date plus extensions (September or October depending on the type of entity). However, SIMPLE IRAs must have already been established by October 1, 2015 to make a 2015 contribution. SEP IRAs can be created and contributed to up until the filing date plus extensions. For a full listing of contribution limits for the accounts we serve, visit this page.