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Looking to lower your tax bill or max out your retirement account? Here are the IRA contribution deadlines for 2022—and even 2023

December 12, 2022, 3:36 PM UTC
Photo illustration of a hand putting coins into a jar labeled "retirement" and a stop watch clock face overlaid on top.
If you want to max out your IRA contributions for 2022, you have until Apr. 18, 2023.
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As the year’s end approaches, it’s a good idea to start thinking about last-minute moves you can make to help reduce your 2022 tax bill.

Among the options is contributing more money to an individual retirement account (IRA), which can potentially help reduce your annual taxable income. When making these contributions, it’s important to be aware of the funding deadlines and rules surrounding contribution limitations to ensure you avoid penalties.

2022 and 2023 deadline and maximum contributions

If you’re considering adding more money to your IRA accounts in preparation for the upcoming tax season, make sure you know the contribution deadlines. For most IRAs, the 2022 contribution deadline is the same day income taxes are due, which is April 18. Similarly, the deadline for most 2023 IRA contributions is also the tax filing deadline.

But not all IRAs follow this deadline. Simplified Employee Pension (SEP) IRAs, which are used by businesses or self-employed individuals, are one example of an IRA that’s not required to meet the same deadlines. 

“Contributions to a SEP IRA are based on when the business tax returns are due—including extensions,” says Rob Williams, managing director of financial planning at Charles Schwab. “If using the calendar year and using an extension, contributions can be made as late as October 16, 2023, for 2022, for example.”  

The maximum allowable IRA contributions are another important rule to bear in mind. The total contributions you can make annually to all of your traditional IRAs and Roth IRAs cannot be more than the following:

  • 2022 maximum allowable IRA contribution: $6,000 
  • 2023 maximum allowable IRA contribution: $6,500
  • 2022 catch-up contributions for those 50 and older: $1000 
  • 2023 catch-up contribution for those 50: $1,000

For self-employed individuals, SEP IRA contributions are limited to 25% of your net earnings from self-employment, which does not include contributions for yourself, up to a maximum of $61,000 for 2022, according to the IRS. The 2023 limit is $66,000.

Types of income eligible for IRA contributions 

There are also specific guidelines regarding the type of income that can be added to IRA accounts. This too varies based on the IRA in question. For traditional and Roth IRAs, the contributions must be made from taxable or earned wages.

“Think of earned income as income coming from employment—such as wages, salaries, commissions, tips, and bonuses,” says Rita Assaf, vice president of retirement products for Fidelity.

If you’re self-employed, you may contribute compensation from your business’ net earnings.

Income you’re not allowed to contribute to a traditional or Roth IRA includes certain types of  investment income, such as from a rental property or interest income. Dividends, pension income, annuity income, and deferred compensation benefits are also not eligible for IRA contributions.

“Rental, interest, and dividend income are not incomes from work. This income is derived from the property you own [or from investments], which is not the same as earned income,” says Williams.

Annuity and pension funds follow similar restrictions. Although you may have worked to put money towards a pension or annuity, distributions from these types of accounts are derived from the pension or annuity assets, which is not considered compensation from work.

What to do if you want to max out your contributions

Maxing out your contributions is generally a good idea, not only because it provides increased tax benefits in some cases but can also help ensure you’re fully prepared for retirement. While reaching the max-out limit can be challenging, it’s not too late to try just that for the coming tax season.

“If you are looking to max out your contributions for 2022, you still have plenty of time,” says Assaf. “Some actions you can take right now to start making this goal a reality include calculating how much more you can contribute based on your earned income, reviewing your budget and whether it is feasible, and identifying how much more money you can afford to contribute.”

You might also consider establishing a direct deposit or automatic contribution from your paycheck or checking account to your IRA to help you reach your contribution goals.

It’s also important to consider your contributions in light of your overall financial picture and whether maxing out makes the most sense for you right now. “If you have high-interest debt, make sure you’re making headway paying that down—the average credit card interest rates are in the high teens, which can spiral out of control quickly,” says Williams. 

The takeaway 

If you’re hoping to max out IRA contributions in advance of the 2022 tax filing deadline, there’s still plenty of time to do so. Just make sure you understand what type of income is eligible for IRA funds and the deadline for adding money to your account. 

In addition, it’s a good idea to consider your contributions in light of your overall financial picture. For those who have significant credit card debt, maxing out an IRA account may not be the best move.

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