If you haven’t yet made an IRA contribution for 2016, there’s still time to make one, until the tax filing deadline. Taxpayers have until Tuesday, April 18, 2017, to file their 2016 returns and pay any taxes due. The deadline is later this year due to several factors. The usual April 15 deadline falls on Saturday this year, which normally would give taxpayers until at least the following Monday. However, Emancipation Day, a D.C. holiday, is observed on Monday, April 17, giving taxpayers nationwide an additional day to file. By law, D.C. holidays impact tax deadlines for everyone in the same way that federal holidays do.
If you already have made your 2016 contribution, it would be financially wise to go ahead and make one for 2017. That will give your account an extra year of investment returns. The contribution limit for each year is $5,500. Those who are 50 and over may make an additional “catch-up” contribution of $1,000.
The deduction for IRA contributions phases out for those higher-income taxpayers who also are covered by an employer’s retirement plan. The phase-out range was bumped up slightly for 2017 contributions, as shown in the table below.
IRA deduction thresholds
Taxpayers below the threshold may take a full deduction for their contributions to traditional IRAs.
Source: IRS Notice 2016-141
For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $186,000 and $196,000 in 2017, up from $184,000 and $194,000 in 2016.
(March 2017)
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