It's not too late to add to 2017 IRA and save on taxes

With 2017 over, taxpayers may think it’s too late to stash earnings in a retirement account and get a tax deduction for the year.

But 2017 contributions for many kinds of retirement accounts can be made up until April 17, 2018, or whenever you file your taxes, and some can be made even later by those who get extensions.

An individual retirement account is a type of savings account that gives Americans tax advantages for saving money for retirement. You can open an IRA at any type of institution that offers such accounts, including banks, brokerage firms or insurance companies.

Many people contribute to a 401(k) plan through their employers. Taxpayers can contribute up to $18,000 of pretax income for 2017. Workers 50 and older can contribute an additional $6000 each year.

The deadline to make 2017 contributions for a 401(k) or a 403(b) plan through employers was Dec. 31, 2017. However, the beginning of the year is a good time to verify that you are getting the maximum benefit for those accounts for 2018. That includes contributing at least as much as your employer will match.

Even if you contribute to a 401(k) or 403(b) at work, you can still save money in an individual IRA, although it may not net you an additional tax deduction. The IRA contribution limit for 2017 is $5,500, plus an extra $1,000 if you’re 50 or older. Your contribution can be to a traditional IRA or a Roth IRA, or split between the two, as long as the total contribution fits into those limits.

More details, including income limits for deductions, are in IRS Publication 590. The rules are complex, so it’s worth consulting an account or other expert. Some online tax-filing programs, including TurboTax, have calculators you can use to see how contributing to an IRA will affect your tax liability.

Low- and moderate-income taxpayers can get an additional tax benefit for contributing to an IRA or 401(k) plan through the saver’s credit, also known as the retirement savings contribution credit. Workers eligible for the maximum can get a credit of up to 50% of the first $2,000 contributed, although the IRS cautions that most workers get less than that. To be eligible for the saver’s credit, your adjusted gross income must be less than $31,000 for singles or married persons filing separately, $62,000 or less for married couples filing jointly and $46,501 for heads of household.

Here are three types of retirement vehicles to which you can still make contributions for 2016:

Traditional IRA: The deadline for contributing to a traditional IRA is April 18 or when you file your taxes, whichever comes first. You have until that deadline to open an account if you don’t have one already.
Roth IRA: The rules are the same: You can open a Roth IRA account and make 2017 contributions until you file your taxes on April 18.
SEP IRA: This option, which stands for Simplified Employee Pension plan, is for anyone who has income from self-employment or for small businesses. You can set up and contribute 2017 money to a SEP-IRA through whenever your taxes are due, even if you take the maximum extensions, meaning Oct. 15. Taxpayers with self-employment income can contribute up to $53,000 a year, or up to 20% of net earnings from self-employment.