Roth IRA Explained

This rule applies for any of the IRAs, from SEP-IRAs to Traditional to whatever, but basically you can contribute to any particular year’s IRA from January 1 of that year to the IRS income tax filing deadline of that year, usually April 15 of the following year. Sometimes that date is extended because of holidays for certain areas of the country but generally it holds true.

For example, for 2006, you could contribute to a Roth IRA as early as January 1st, 2006 and as late as April 17th, 2007 (15th was a Sunday, 16th was a holiday in the New England states). That meant anytime in the first quarter or so of 2006, you could contribute to 2006 or 2005 - making it crucially important that you specify, on your contribution, what year you were contributing to. By default, brokerages and financial institutions will default to the calendar year. So if you write nothing and send in a check on Feb. 1st, 2006, they will count the IRA contribution against your 2006 limit.