Identify Year of IRA Contributions

April 15th is right around the corner and many of you will be making your 2007 IRA contributions right now, that’s great news. Putting money away into a Roth or Traditional IRA is one of the best ways you can save for your retirement, so kudos to you for doing it.

Many brokerages and mutual fund firms are now allowing online ACH transactions and through the menu system you can identify which year the contribution is for. For those who still mail in checks, it’s crucial that you identify the year, which is as simple as putting “2007 IRA Contribution” in the Memo line.

What happens if you forget and your 2007 contribution is listed as a 2008 contribution? What if the brokerage misses the line and puts it into 2008? Not a problem, simply write them a letter and have them “re-characterize” the contribution from a 2008 to a 2007 contribution and you will be okay.

Always double check to see if the brokerage characterized it correctly, you don’t want to discover it next April!





One response to “Identify Year of IRA Contributions”

  1. Jan Douw

    When is the deadline for getting the contribution re-characterized?
    I made two contributions 2008, one in March, and one in August. They were both treated as 2008 contribution, but I would like the one in August to be treated as a 2009 contribution.
    Is it still possible? My broker claims that I need to file an “excess contribution form”, but I have not exceeded the contribution for 2008.