Contributions for a given tax year can be made through that year’s filing deadline, excluding extensions.
The contribution deadline for a tax year will normally be April 15th of the following year, though occasionally we are given an extra day or two if April 15th falls on a Sunday or holiday.
You have until April 15, 2013 to make contributions for the 2012 tax year.
If you make a contribution for a tax year after the year end, however, be sure to make it clear to your financial institution that the contribution applies to the preceding tax year. If the contribution is accidentally applied to the current year and you later make additional contributions for the current year, you could end up with an excess contribution penalty if the total contributions exceed the annual limit. The penalty for excess contributions is an additional 10% ”excise tax” on the excess contributions. This additional tax is reported on Form 5330.
The Savers Credit
Taxpayers with low or moderate incomes could also be eligible for a credit for retirement savings in addition to deferral of income tax. Woo hoo! The credit, formerly known as the Retirement Savings Contribution Credit, applies to taxpayers earning:
These limits are for 2012 and are subject to an annual adjustment.
The Savers Credit is non-refundable, meaning the credit can eliminate taxes but won’t generate a refund.
The maximum credit is $1,000 and varies by income and filing status. To determine if you qualify, see Form 8880 and instructions.
I hope each of you has a wonderful 2013 and that your tax season is hassle free!
Diane Kelly is the author of the humorous Death and Taxes romantic mystery series.
Authors Guild on Penguin/Random House
S&S and Hachette E-book Agreement (DOJ Approved)
S&S and Hachette Book Group publishers are allowing agencies to discount individual titles. Amazon checked a few titles for comparison:
Simon & Schuster