When Can I Add to an IRA for the Fiscal Year?

Anne Mathews for Demand Media writes:  You don't have to miss out on the tax advantages of an individual retirement account just because you file your taxes based on a fiscal year. The IRA deadlines are straightforward if you file on a calendar year basis. If you use a fiscal year, the same rules apply, but the deadlines shift accordingly.

Timeline

You can contribute to a traditional or Roth IRA at any time during the year, and up until the due date for filing that year's taxes, not counting any extensions. For taxpayers filing based on a calendar year, this due date is April 15. However, if you file on a fiscal-year basis, the deadline for filing your tax return -- and thus for contributing to an IRA -- is the 15th day of the fourth month after the end of your tax year. The due date is the next business day if the 15th falls on a Saturday, Sunday or holiday.

Example

If your fiscal year runs from Nov. 1, 2012, to Oct. 31, 2013, the fourth month after October is February, so your tax return is due Feb. 15, 2014. You have until Feb. 15 to contribute to an IRA for the fiscal year ending in 2013. This is true even if you file your taxes before that date and even if you have an extension allowing you to file after that date.

Tax Return Timing

You can contribute to an IRA all the way up to your filing deadline, even if you decide to file your taxes ahead of schedule. This means you could file your tax return claiming a deduction for contributing to a traditional IRA, get a tax refund and use the refund to make the IRA contribution you already claimed -- as long as you can get all that done by the deadline for filing your tax return.

Designating the Year

If you don't tell your IRA custodian otherwise, the custodian can report your IRA contribution to the Internal Revenue Service as a current-year contribution. Because most taxpayers use a calendar year, your custodian may not have experience with filing on a fiscal-year basis. You should be clear in your communications with the custodian and keep your own records of what contributions you made and for what fiscal year. This will help sort out any confusion if the IRS audits you.