Final answer:
The deadline for making contributions to a Roth IRA for the current tax year is April 15, 2021. This is the last date to contribute to a Roth IRA for the previous tax year, aligning with the tax filing deadline. It's important to keep track of changes in IRA contribution limits and tax laws annually. e.) April 15, 2021
Step-by-step explanation:
Mary Ellen has asked about the deadline for making contributions to a Roth IRA for the current tax year. The correct answer to this question is e.) April 15, 2021. This is the deadline for contributions to a Roth IRA for the tax year in question, which allows individuals to contribute funds to their IRA until the filing deadline for their tax returns, typically April 15 of the following year. For example, contributions for the 2020 tax year can be made up until April 15, 2021.
The popular retirement savings vehicle, a Roth IRA, allows individuals to save for retirement with after-tax income, with the benefit of tax-free withdrawals in retirement. Contributing to a Roth IRA has annual limits, which are subject to change, but for 2014 and 2015 the total contributions to both traditional and Roth IRAs could not exceed $5,500 ($6,500 for those age 50 or older). It is essential to monitor changes in tax laws and IRA contribution limits annually, as they can impact retirement planning.
Making contributions to a Roth IRA by the deadline ensures that individuals take full advantage of the potential tax benefits for that year. It's important for Mary Ellen to remember that December 31 is the last day to take actions that may affect her current year's tax return, like conversions from a traditional IRA to a Roth IRA, but contributions can continue to be made until the tax filing deadline the following April.