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I noticed that my broker allows me to contribute to both 2020 and 2021. I have already maxed out my 2020 IRA contributions. Since I cannot deduct anything from my income via these contributions due to my income I thought it would be wise to start to contribute to 2021 as well. Since my employer does not extend a retirement plan to me I don't really have any other options.

I couldn't find any regulations on the IRS website that prevent this. The only regulation I could find was available here, and it says I can only contribute a maximum of 6,000 to either a roth or traditional IRA, and only 6,000 for a given year. It is not clear whether this is the current year (as in 2020) or the notated year (6,000 for 2020, 6,000 for 2021).

Is this possible? Are there any downsides?

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  • "Since I cannot deduct anything from my income via these contributions due to my income" If you were not covered by a retirement plan at work in 2020, and neither was your spouse, you can deduct your full Traditional IRA contributions for 2020, no matter how high your income is.
    – user102008
    May 12, 2020 at 16:52

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Are you sure it's actually 2020 and 2021 instead of 2019 and 2020? If yes, then I would contact your broker because I believe it is a bug in their software and/or a misprint. Right now you should be able to contribute to both tax years 2019 and 2020 until July 15, and then only tax year 2020 from July 16 - Dec 31 of 2020. You cannot start contributing to tax year 2021 until Jan 1, 2021. The fact that you don't have an option to contribute to tax year 2019 right now points to this being a misprint, since you should have that option.

As for your situation, in addition to notifying your broker of the probable mistake, if you did not max out your contribution for 2019 yet, you still can do that until July 15.

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  • You probably mean contributions for 2020 are allowed until April 15th 2021, not the end of CY 2020.
    – Nosjack
    May 12, 2020 at 13:20
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    @Nosjack - No. I meant from "July 16 - Dec 31, 2020" you can only contribute to tax year 2020. I wasn't actually referring to the date range you can contribute to 2020, because if it was the start date would also be different- it would have to be Jan 1, 2020 - Apr 15, 2021. ;)
    – TTT
    May 12, 2020 at 14:48
  • Ah, was confusing the first half a dozen times I read it.
    – Nosjack
    May 12, 2020 at 15:36
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You can contribute to your IRA 'for 2020' from Jan/1, 2020 till Apr/15, 2021, a total of 15.5 months; this is true for every year respectively. You just have to stay within the annual limit for each plan year. This means that in each period from Jan/1 to Apr/15, you can contribute for the previous year and the current year.

It is legal to do this in any sequence (but contributing to the old year first is normally smarter); so you could send both payments on the same day if you want (but make sure to mark one 'applies to 2019')

For 2019, there is a special extension, and the deadline is once postponed to Jul/15, 2020. If you do that, you should be careful that your provider handles it correctly, as this is new and their software might have errors, but it is legal.

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    "and the deadline is once postponed to Jul/15, 2021" – I think you mean Jul 15, 2020.
    – Tanner Swett
    May 12, 2020 at 3:48
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You can contribute to an IRA from January 1st of the year in question to April 15th of the following year. As a result, during the period January 1st to April 15th you may be able to contribute to either IRA (which is why you need to specify).

I do not know if the deadline has been extended this calendar year in line with the extension of the tax filing deadline.

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  • Would this mean I could contribute to both legally? I interpreted what you said as I could only begin contributing to the 2021 IRA January 1st of 2021 to April 2021.
    – CL40
    May 12, 2020 at 2:08
  • As it is after April 2020, it is probable that your broker's software simply rolled over to the next year. You can contribute to your 2020 until April 15 2021. You can contribute to your 2021 on Jan 1 2021 until April 15 2022.
    – xirt
    May 12, 2020 at 2:13

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