Tax Season – Can you Contribute for Two Tax Years?

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Did you make your full 2018 contribution yet? If not, you have another month to take advantage if you so choose.

The period between January 1 and the tax filing deadline (April 15) presents a unique opportunity to make IRA contributions for multiple tax years. Contributions for a given tax year are allowed from the beginning of the calendar year until tax day the following year, giving self-directed investors approximately 15 ½ months to contribute for said year. When the previous tax year overlaps into the following calendar year, self-directed IRA holders can make contributions for both years.

As such, you may be able to contribute for 2018 and 2019 right now, assuming you haven’t already contributed your annual limit for either tax year. Even if you opened your account after December 31, 2018, you can still contribute for 2018 up until tax day. Also keep in mind that while annual contribution limits for several account types rose in 2019, 2018 limits still apply for deposits attributable to that tax year. For instance, Traditional and Roth IRAs featured a $5,500 contribution limit in 2018, but holders of these accounts may contribute up to $6,000 in 2019 (the $1,000 catch-up contribution for account holders age 50 and above still applies). If 2019 rolls around and a Roth IRA holder hasn’t made contributions for either tax year, he or she may contribute a combined $11,500 (2018 plus 2019 at their respective annual limits) all at once.

By maximizing your contributions and putting them to work in alternative IRA investments, you can broaden your earning possibilities and potentially accelerate your retirement growth. For more information about self-directed investing or to make a contribution, feel free to give us a call at 877-742-1270 or send us an e-mail at