You have until April 16 to contribute to an IRA for 2000. (Some other types of retirement plans allow you to extend the deadline if you extend the due date of your tax return but that’s not true for IRAs.) At the same time, you can contribute now to an IRA for 2001, to get a head start on tax-deferred buildup.
Everyone under age 70-1/2 who earned at least $2,000 last year can contribute that much to an IRA for 2000. For married couples where only one spouse has earned income (at least $4,000), each spouse can contribute up to $2,000.
However, you may not be able to deduct your IRA contribution, especially if you’re a federal employee covered under a government retirement plan. Generally, you need adjusted gross income (AGI) below $32,000 as a single taxpayer or below $52,000 on a joint return, in order to claim a full $2,000 deduction. Slightly above those AGI levels, you might get a partial deduction.
If you can’t deduct your IRA, you can make a non-deductible contribution. That money can accumulate, tax-deferred, inside an IRA.
