You can still contribute to a Roth IRA even if you have already filed your tax return. You can contribute up until the tax return filing deadline no matter when you filed.
If you’re interested in making a Traditional IRA contribution, see Traditional IRA Contributions After You File.
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This post is provided for general information only. Please confirm the details and circumstances of your unique situation with your tax accountant or other appropriate advisor before taking action.
Why would you contribute to a Roth IRA after filing your taxes?
There are several reasons you might want to make a Roth IRA contribution after filing your taxes.
- Your income increased, and you have extra money.
- You were holding cash in a savings account and now want to invest it.
- You got your tax refund and didn’t realize you could use it to fund your IRA.
- You simply changed your mind.
No matter why you want to contribute to your Roth IRA, you can do so as long as you haven’t met your contribution limit for the year.
What is the benefit of contributing to a Roth IRA after filing your taxes?
The main benefit is making the most of your IRA contribution limits. You can only put in $6,000 per year.
Let’s say you didn’t contribute anything in 2021 but now have $1,000 in early 2022. You can either put it towards 2021 or 2022. If you put it towards 2021, you can still potentially contribute another $6,000 in 2022. If you put it towards 2022, you only have $5,000 remaining for 2022.
Do you need to amend your tax return to fund a Roth IRA after filing your taxes?
You don’t need to amend your tax return if you change your mind about contributing to a Roth IRA. Roth IRA contributions don’t affect what you owe. They also don’t even go on your tax return.
You might think you need to report your Roth IRA contributions because your tax filing software asks you about them. Your tax filing software is asking you for two reasons.
- To make sure you’re aware that you’re eligible to contribute to a Roth IRA and what the limit is.
- To determine whether you qualify for the Saver’s Credit.
The Saver’s Credit is a tax credit that lets low to middle-income earners take a tax credit for retirement contributions, including Roth contributions. If you’re under the income limit, you will want to amend your tax return to claim the credit and get some money back.
How does the IRS know what you contributed to a Roth IRA?
You may be worried that if you don’t amend your tax return, the IRS won’t know what you contributed to your Roth IRA. This is important because you can withdraw contributions at any time without taxes and penalties. If you withdraw earnings before retirement age, you may have to pay taxes and penalties.
Your IRA provider sends Form 5498 to the IRS each summer. Form 5498 reports your IRA contributions and the type of account. This lets the IRS know what you’ve contributed, and it’s also good to keep for your records.
Should you use your tax refund to fund your Roth IRA?
You can use your tax refund to fund your Roth IRA, but you need to put the cash in your IRA by the tax filing deadline. If you file early in tax season, you’ll usually get your refund in plenty of time. However, there’s a risk that a problem with your tax return could delay your refund until after April 15th.
Similarly, if you don’t file until later in March or April, the IRS may not issue your refund in time for you to deposit it into your IRA.
If you don’t get your refund into your IRA by the tax filing deadline, you’ll have to count it as a contribution for next year.