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Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 10:06 am
by Erwin
What is the last day to contribute in Roth IRA for 2012 ? 31/12/2012 or 15/4/2013 ?

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 10:10 am
by BuckyBadger
Tax day is the last day to contribute. Not calendar year.

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 10:14 am
by Rainier
Could be as late as 10/15/13

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 10:24 am
by rjbraun
BuckyBadger wrote:Tax day is the last day to contribute. Not calendar year.
Really? I didn't know that, good to know! So is this a change from prior years? It's always been calendar year-end in the past, right?

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 10:36 am
by The Wizard
The calendar year deadline may be for conversions from a Trad IRA to a Roth...

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 10:45 am
by Erwin
The Wizard wrote:The calendar year deadline may be for conversions from a Trad IRA to a Roth...
Do you mean that for conversions from conventional IRA to Roth IRA is 31/12/12?

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 10:48 am
by The Wizard
mpt follower wrote:
The Wizard wrote:The calendar year deadline may be for conversions from a Trad IRA to a Roth...
Do you mean that for conversions from conventional IRA to Roth IRA is 31/12/12?
Yes.
That's because conversions are taxed as additional income for the year, and income practically always belongs to the calendar year in which it occurs...

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 10:56 am
by sscritic
A conversion is not a contribution. A contribution is not a conversion. Different strokes for different folks.

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 11:08 am
by Greenbeans
To clarify, a backdoor conversion for 2012 must be completed by 12/31? I (wrongly?) assumed your contribution and conversion deadlines would be the same. Don't individuals on the margins need to compile their tax return in order to decide what type of IRA to contribute to or whether to undertake a conversion?

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 11:14 am
by BuckyBadger
rjbraun wrote:
BuckyBadger wrote:Tax day is the last day to contribute. Not calendar year.
Really? I didn't know that, good to know! So is this a change from prior years? It's always been calendar year-end in the past, right?
As far as I know, it's always been tax day, not calender year end. At least as long as I've been contributing...

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 11:44 am
by fareastwarriors
for 2013, the contribution limit is $5,500 right?

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 11:50 am
by The Wizard
fareastwarriors wrote:for 2013, the contribution limit is $5,500 right?
For youngsters, yes. Old folks get another $1000.
There's web link somewhere that discusses all the various federal limits...

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 11:53 am
by Epsilon Delta
Rainier wrote:Could be as late as 10/15/13
Do tell. An extension does not change the contribution deadline.

If you want exotica I suppose you could elect a financial year ending in December, and you would deserve what you got.

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 12:33 pm
by Default User BR
Epsilon Delta wrote:
Rainier wrote:Could be as late as 10/15/13
Do tell. An extension does not change the contribution deadline.

If you want exotica I suppose you could elect a financial year ending in December, and you would deserve what you got.
Right. The deadline for most people is tax day without extensions. That can be as early as 4/15, but could be later due to weekends and holidays.

The deadline for recharacterization does include extensions.


Brian

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 12:35 pm
by Default User BR
BuckyBadger wrote:As far as I know, it's always been tax day, not calender year end. At least as long as I've been contributing...
Sure. For Roths many people won't know how much if any can be contributed until they work out their MAGI. Similarly, some people contributing to traditional IRAs won't know how much would be deductible.


Brian

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 2:06 pm
by rjbraun
BuckyBadger wrote:
rjbraun wrote:
BuckyBadger wrote:Tax day is the last day to contribute. Not calendar year.
Really? I didn't know that, good to know! So is this a change from prior years? It's always been calendar year-end in the past, right?
As far as I know, it's always been tax day, not calender year end. At least as long as I've been contributing...
Sorry, folks. I realize now that the OP was for contributions, while I was referring to a conversion from a Traditional IRA to a Roth IRA. In that case, the deadline is indeed calendar year-end. I guess wishful thinking on my part that the deadline would be tax day. :wink:

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 4:45 pm
by BigFoot48
The Wizard wrote:The calendar year deadline may be for conversions from a Trad IRA to a Roth...
Good to know. I was wondering if I should update the tax rates in my Conversion model on January 1 (assuming they are known!) and am glad I no longer have to research the answer myself. Thanks for the info.

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 6:17 pm
by Alan S.
BigFoot48 wrote:
The Wizard wrote:The calendar year deadline may be for conversions from a Trad IRA to a Roth...
Good to know. I was wondering if I should update the tax rates in my Conversion model on January 1 (assuming they are known!) and am glad I no longer have to research the answer myself. Thanks for the info.
Technically, the actual conversion deadline is 3/1/2013 for people who receive a TIRA distribution on 12/31. They can sit on it for 60 days and roll it over to their Roth IRA on March 1st. It's still reported as a 2012 conversion for tax purposes. But for the Roth conversion 5 year holding period, the first year is 2013.

Obviously, most conversions are done by direct transfer which eliminates the 60 days, but it's not a requirement.

Big foot - you might be updating those tax rates more than once if fiscal cliff negotiations spill over to 2013, rates rise, and then are retroactively adjusted later. If Congress procrastinates too long, while unlikely, we could end up with blended rates for 2013.

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 9:30 pm
by crowd79
According to Vanguard's link below, contributions for 2012 IRA's can be made up until Tax Day 2013 (April 15, 2013).

https://personal.vanguard.com/us/insigh ... rep-122012

Scroll down to #3. It plainly says "You have until April 15, 2013, to make an IRA contribution for the 2012 tax year."

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 11:11 pm
by Alan S.
For procrastinators, you need to know more than the tax date. The IRS considers IRA contributions to be subject to POSTMARK deadlines for prior year contributions.

However, not all IRA Custodians want do deal with postmarks and some may use receipt date while tossing the envelope. Don't take chances.

Re: Last day to contribute in Roth IRA for 2012 ?

Posted: Tue Dec 11, 2012 11:34 pm
by grabiner
Greenbeans wrote:To clarify, a backdoor conversion for 2012 must be completed by 12/31? I (wrongly?) assumed your contribution and conversion deadlines would be the same. Don't individuals on the margins need to compile their tax return in order to decide what type of IRA to contribute to or whether to undertake a conversion?
Yes, but you can convert before 12/31/12 and recharacterize the conversion up to the extended due date 10/15/13 if you converted too much (or for any other reason). Similarly, if you contribute to an IRA in 2012 for 2012, you can recharacterize the contribution to the other type of IRA by 10/15/13.

And this is necessary. If you contribute to a Roth IRA in 2012, you might discover, when you file your taxes, then you are not eligible for a Roth IRA because you are over the income limits. Therefore, you must be able to correct the Roth IRA contribution up to the last date for filing the 2012 taxes, which is 10/15/13 (if you have an extension). In order not to penalize taxpayers who didn't request an extension, the IRS allows you to recharacterize on an amended return through the extended due date as long as you filed on time.