Prior Year Contributions questions
I’ve been receiving conflicting advice from our home office and from a tax professional colleague of mine so I figured I’d come to the experts!
I know that you can make contributions to a Roth IRA or Traditional IRA for 2011 up until Tax Day, but did the account need to be ESTABLISHED (even if unfunded) in 2011? I have a couple of new clients who would like to open new Traditional IRA’s and make contributions for 2011 if they’re still allowed, but my colleague didn’t seem to think that they were allowed if they didn’t formally open the account in 2011 or earlier. Is there an IRS publication that I can refer to?
Permalink Submitted by Alan Spross on Tue, 2012-01-17 18:08
The account need not be opened in 2011, and can be opened right up to the tax deadline of 4/17/2012 for 2011 contributions. IRS Pubs do not mention account opening dates, and only address contribution deadlines without reference to account dates. Of course, for both the account and contribution, it is better not to wait until the last minute. Since the period from 1/1 to the tax deadline allows contributions to be made for both the prior year and the current year, any contribution should be clearly enumerated with respect to the year it applies to and confirming statements should be carefully checked. Most errors can be corrected easilyt if caught by the IRA owner within a short time.