08 Mar Can I credit my IRA contribution to different tax year?

Q. I’m getting ready with all my tax paperwork and I’m realizing my IRA contribution made in 2022 was actually credited for 2021. I wanted it to be credited for 2022. Can I change this without having some kind of penalty?
— Error-maker

A. Mistakes happen.

Fortunately, there are options.

It’s not uncommon for contributions to be credited to the wrong tax year, said Joseph Sarnecki, a certified financial planner with U.S. Financial Services in Fairfield.

He said your first option is to simply contact your custodian and ask it to reclassify the contribution. It would then need to send you a corrected form indicating that the contribution you made in early 2022 was supposed to be for the current tax year, not the prior year, he said.

There is no penalty for this.

“If you did not make a contribution for 2021, and were eligible, you can apply that for 2021 and file an amended return for last year, reflecting the IRA contribution, and fund 2022 now, assuming you have the funds available to do so,” he said.

If you do that, you have until April 18, 2023 to make a 2022 IRA contribution, he said.

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This story was originally published on March 8, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.