Specify Your Roth IRA Contributions

Until April 15th, you can still make a contribution to your Roth IRA for 2006; but you can also make contributions to your Roth IRA for 2007 as well. So, it is important that when you send in your check, you specify which year it is for or your brokerage will likely add it as a 2007 contribution.

It isn’t the end of the world if you send a check, don’t specify the year, and it’s applied to this year instead of last year. All you will need to do is call up your brokerage and explain that you need your contribution recoded to the prior year. However, those phone calls usually take about half an hour (they all take at least half an hour) so it’s best to remember to write it down.

Now, an attractive alternative to a paper check is an electric funds transfer (EFT) or ACH transfer where you will probably just specify what year the contribution is for on the brokerage website’s form. I highly recommend electronic transfers mostly because I don’t trust the postal service when it comes to mailing important documents (would you send a passport or birth certificate through the mail?) and a deposit check, especially a relatively time sensitive one, is pretty important.