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Over the last couple of weeks, employers have been handing out a seemingly endless amount of forms for their employees to complete.  Among them are income tax withholding forms, cafeteria plan deduction forms, and possibly retirement plan deferral forms.

Not all employers give you the option to begin retirement plan deferrals in January.  If the plan does not follow a calendar year,  the time periods you’re allowed to join the plan, also known as open enrollment periods, could be any other month during the year.

What if you missed it?  Are there other options?  Yes, but there may be limitations.  You may still be able to contribute to a traditional IRA, but the contribution may not be deductible.  Even so, it is usually a good idea to make the contribution.  The earnings will still grow tax-free, and that portion of the contribution that was not deductible can be withdrawn in retirement without being taxed.

To track non-deductible contributions, the IRS provides Form 8606 to file with your return.  That, and your own record-keeping, are really the only ways to track the non-deductible contributions to your IRA. If you don’t want to pay tax twice on the same money, it’s absolutely worth the effort and can be done pretty easily using a spreadsheet, or, if you’re “old school”, a manual ledger.

As always, check with your professional tax preparer and financial planner to determine if an IRA contribution is the best solution for you.

To your better wealth,