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I‘ve written quite a bit on this site about how I believe everyone should open and fund an IRA, whether it's a Roth IRA or a Traditional IRA. For a lot of folks it's one of those things that they just continually put off, and once it has hit the new year, they believe it's too late to contribute for the previous year, so they continue to procrastinate. The problem is, that's not the case.

What a lot of people don't realize is that the deadline to open and contribute to an IRA or to recharacterize an IRA contribution is not the last day of the 2010 tax year, but instead it's tax day. This year that falls on April 18th, 2011.

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IRA Contribution Deadline

As people start putting all of their tax documentation together it can be easy to forget about all the tasks that you can still perform for the 2010 tax year, even once it turns over to 2011.

Even if you haven't opened an IRA prior to 12/31/2010, you can still open one in 2011 before tax day, and contribute to it for the 2010 tax year. That applies to both the Traditional and Roth IRA. So there's no excuse not to open one – it isn't too late!

Add to that the fact that you have 3 extra days this year to open an account and contribute, and it should be a lock. April 15th, which is usually tax day, falls on a federal holiday this year – Emancipation Day – which is observed in DC. Holidays impact tax deadlines for everyone, so this year the tax filing deadline is April 18th.

IRA Recharacterization Deadline

Sometimes people will make a contribution to their retirement account, and later on they'll decide that they want to recharacterize the contribution so that it is in a different type of IRA (traditional vs. Roth). Some of the reasons why you might do this include:

Your income exceeds certain limits: Sometimes you may plan on meeting an income limit for your taxes, but when you make a contribution or conversion to your IRA, it bumps you over the limit. This happens sometimes when receiving a substantial bonus at the end of the year.

Sometimes you may plan on meeting an income limit for your taxes, but when you make a contribution or conversion to your IRA, it bumps you over the limit. This happens sometimes when receiving a substantial bonus at the end of the year. Your situation changed: Since you contributed you have realized that a Roth IRA (or traditional) would be better for your situation.

Since you contributed you have realized that a Roth IRA (or traditional) would be better for your situation. You need to lower your AGI (adjusted gross income): Sometimes certain tax credits or deductions are only eligible to folks in certain income levels. You can lower your taxable income by recharacterizing.

Whatever the reason for your recharacterization, There are a few steps you must perform by the deadline on tax day, April 18th. You must complete a transfer, and report the recharacterization on your taxes (Form 8606).

Are you putting off performing either of these tasks? Has your procrastination caused you to miss the deadline in past years? Tell us your thoughts in the comments.

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