With the 2021 tax-filing deadline quickly approaching, now is also a good time to review the deadlines and limits for making and correcting 2021 IRA contributions.
IRA Contribution Deadline
A 2021 IRA contribution could have been made any time in 2021. In addition, a 2021 IRA contribution may be made in 2022, if it is made by the appropriate deadline, and it is designated for 2021 by the IRA owner. The deadline for 2021 IRA contributions is Monday, April 18, 2022, except for residents of Maine and Massachusetts, where the deadline is Tuesday, April 19, 2022. If being sent by mail, an IRA contribution is treated as being made by the deadline if it is designated for 2021, and it is postmarked no later than the appropriate deadline. The postmark may be a U.S. Postal Service postmark or an IRS-approved private delivery service postmark (e.g., most UPS, Fedex, and DHL delivery services).
2021 Contribution Limits
For 2021, the Traditional and Roth IRA contribution dollar limit is $6,000 for individuals under age 50 ($7,000 if age 50 or older by the end of 2021). For the purpose of the annual contribution limit, Traditional IRA contributions and Roth IRA contributions are aggregated (i.e., combined). The IRA contribution limit is not affected by contributions made to other tax-favored retirement accounts, such as 401(k) plans.
2021 IRA Contribution Correction Deadline
The applicable deadline for correcting 2021 Traditional and Roth IRA contributions (e.g., excess contributions or recharacterizations) without penalty for taxpayers who file a timely federal income tax return is Monday, October 17, 2022. However, in some cases, it may make sense to correct the contribution by withdrawal or recharacterization by April 18, 2022, unless the individual has a tax-filing extension, rather than waiting for the actual October deadline.