Today TaxMama hears from Eric Smith, from the IRS. He tells us that certain taxpayers are still eligible to make contributions to their 2006 IRA accounts, and maybe even earlier years. How is this possible?
Eric Smith tells us that all those folks in the Northeast storms zone have until June 25, 2007 to make their IRA contributions.
There is even more time for folks who served in combat zone localities. They may now put money into their individual retirement accounts, even if they received tax-free combat pay – as a result of the Heroes Earned Retirement Opportunities – known as the HERO Act. Normally, IRA contributions are only allowed up to your taxable earned income.
Qualifying military personnel may have all the way until May 28, 2009 to make contributions for 2004, 2005, 2006.
If you’ve filed returns for any of those years, you may make your IRA contributions until May 28, 2009, and amend those filed returns after you’ve made the contributions.
Incidentally, this is an excellent opportunity to make Roth IRA contributions, which will grow tax-free until you retire. If you make Roth contributions, you won’t get a deduction, so you don’t have to amend any tax returns – you’ll just have to fight with your account administrator to get them to allow you make contributions that far back.
One other group may also have extra time. Smith is still checking on that. Those people who were affected by the Virginia Tech shooting have until October 15th to file their tax returns and pay their tax liabilities, without penalties. I believe they also have until October 15 to fund their IRAs. If you are affected, and would have liked to have made the contribution, but were far too distressed to deal with mundane details – let me know and I’ll get a definitive answer for you.
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- Heroes Earned Retirement Opportunities :: Information about prior year IRA contributions for military personnel