By Jaci K., Customer Education Editor and Guest Blogger
If your New Year’s resolution is to contribute more to your Individual Retirement Account (IRA), you’re in luck! With a carryback contribution, you can contribute to your 2010 IRA now.
Here’s how it works: If you hold a traditional IRA or Roth IRA and you contributed less than the legal IRA contribution limit in 2010 ($5,000 for most investors), then you may be eligible to make up the difference by contributing retroactively. This is called a carryback contribution.
Each year, carryback contributions for the previous tax year can only be made up until the tax deadline. So for 2010 contributions, you have until April 18, 2011, to make a carryback contribution. Remember, this year’s tax deadline was extended to April 18 because of a holiday in the District of Columbia on April 15.
To make a carryback contribution to your traditional IRA or Roth IRA, it’s important to make sure you note that your contribution is for tax year 2010 on your IRA Deposit Slip. If you do not specify that your contribution is for 2010, it will be deposited in your account as a 2011 contribution.
To learn more about IRAs, visit Scottrade’s Knowledge Center. You can also contact your local branch office or call us at (800) 619-7283. We’re here to support you.
Jaci K. has been with Scottrade since 2009 and is the Customer Education Editor. She is responsible for writing and editing all educational content provided by Scottrade to help customers make informed investing decisions. She manages the Knowledge Center, the Media Center and KnowHow News.