By Andy Ives, CFP®, AIF®
IRA Analyst
April 15 is fast approaching. Not only is this the standard tax filing deadline, but it is also the deadline to complete some IRA transactions. But there is a common misconception that certain other IRA transactions can also be done up until mid-April. Such is not the case. Here are a few IRA moves that can be done by April 15, and a few that are already well past their deadline.
Prior-year traditional IRA contributions CAN be made up until April 15. So, if an IRA owner still wants to make a 2025 traditional IRA contribution, there is still time (as of this publication date). Prior-year contributions can be deductible or not. But be forewarned, even if a taxpayer files for an extension to submit his return, that extension does not extend the IRA contribution deadline. It remains April 15.
Prior-year Roth IRA contributions CAN ALSO be made up to April 15. The same extension rules mentioned above apply to Roth IRAs as well. But not all benefits are the same. For example, Roth IRAs have 5-year clocks to consider for tax-free earnings. No such clocks apply to traditional IRAs. A person who opens his very first Roth IRA (via either contribution or conversion) will receive a January 1 start date of that year for his “5-year forever” clock. What if a person who never had a Roth IRA before makes a prior-year Roth IRA contribution in early 2026 for 2025? Since the contribution was for 2025, that person receives a January 1, 2025 start date. A prior-year contribution can shave over 15 months off an initial 5-year Roth IRA clock.
What CANNOT be done up to April 15 is a “prior-year Roth IRA conversion.” There is no such thing. All Roth IRA conversions count for the year of the conversion. For a conversion to be applicable for the 2025 tax return, the dollars must have left the traditional IRA by December 31, 2025. So, a person can make a prior-year (2025) traditional IRA contribution, but if those contributory dollars are then promptly converted, the conversion will count for 2026. This is an important distinction when a person is completing a “backdoor Roth IRA” by making a non-deductible traditional IRA contribution and then converting it.
Example: On April 15, John, age 55, makes a prior-year (2025) traditional IRA contribution for $8,000 and, at the same time, makes a current year (2026) traditional IRA contribution for $8,600. John then converts all $16,600 to a Roth IRA. While the $8,000 contribution will count for 2025, the entire $16,600 conversion is documented and taxed on his 2026 return.
Another transaction that CANNOT be extended to the following year is a qualified charitable distribution (QCD). Like Roth conversions, there is also no such thing as a “prior-year” or “retroactive” QCD. When executed properly by an eligible traditional IRA owner, a QCD can exclude income that would otherwise be taxable if a person just took a normal distribution. However, once a standard withdrawal is paid out to a traditional IRA owner, the deed is done. Yes, you can subsequently give that money to charity, but you cannot claim “QCD.” A charitable deduction could work, but the opportunity to offset that income with a QCD is lost. If the goal was to exclude income in 2025 with a QCD, that QCD must have been processed by December 31, 2025.
If you have technical questions you would like to have answered, be sure to submit them to mailbag@irahelp.com, to be answered on an upcoming Slott Report Mailbag, published every Thursday.