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money (cash, check, or money order). Property can’t be contributed. Although property can’t be contributed, your IRA may invest in certain property. For example, your IRA may pur- chase shares of stock. For other restrictions on the use of funds in your IRA, see Prohibited Transactions, later in this chapter. You may be able to transfer or roll over cer- tain property from one retirement plan to another. See the discussion of rollovers and other transfers later in this chapter under Can You Move Retirement Plan Assets. You can make a contribution to your IRA by hav- ing your income tax refund (or a portion of your re- fund), if any, paid directly to your traditional IRA, Roth IRA, or SEP IRA. For details, see the instructions for your income tax return or Form 8888, Allocation of Re- fund. Contributions can be made to your traditional IRA for each year that you receive compensation and haven’t reached age 701/2. For any year in which you don’t work, contributions can’t be made to your IRA unless you re- ceive alimony, nontaxable combat pay, military differential pay, or file a joint return with a spouse who has compen- sation. See Who Can Open a Traditional IRA, earlier. Even if contributions can’t be made for the current year, the amounts contributed for years in which you did qualify can remain in your IRA. Contributions can resume for any years that you qualify. Contributions must be made by due date. Contribu- tions can be made to your traditional IRA for a year at any time during the year or by the due date for filing your re- turn for that year, not including extensions. For most peo- ple, this means that contributions for 2018 must be made by April 15, 2019 (April 17, 2019, if you live in Maine or Massachusetts). Age 701/2 rule. Contributions can’t be made to your tradi- tional IRA for the year in which you reach age 701/2 or for any later year. You attain age 701/2 on the date that is 6 calendar months after the 70th anniversary of your birth. If you were born on or before June 30, 1948, you can’t contribute for 2019 or any later year. Designating year for which contribution is made. If an amount is contributed to your traditional IRA between January 1 and April 15, you should tell the sponsor which year (the current year or the previous year) the contribu- tion is for. If you don’t tell the sponsor which year it is for, the sponsor can assume, and report to the IRS, that the contribution is for the current year (the year the sponsor received it). Filing before a contribution is made. You can file your return claiming a traditional IRA contribution before the contribution is actually made. Generally, the contribution must be made by the due date of your return, not including extensions. TIP Contributions not required. You don’t have to contrib- ute to your traditional IRA for every tax year, even if you can. How Much Can You Deduct? Generally, you can deduct the lesser of: • The contributions to your traditional IRA for the year, or • The general limit (or the Kay Bailey Hutchison Spousal IRA limit, if applicable) explained earlier un- der How Much Can Be Contributed. However, if you or your spouse was covered by an em- ployer retirement plan, you may not be able to deduct this amount. See Limit if Covered by Employer Plan, later. You may be able to claim a credit for contributions to your traditional IRA. For more information, see chapter 3. Trustees' fees. Trustees' administrative fees that are bil- led separately and paid in connection with your traditional IRA aren’t deductible as IRA contributions. You are also not able to deduct these fees as an itemized deduction. Brokers' commissions. These commissions are part of your IRA contribution and, as such, are deductible subject to the limits. Full deduction. If neither you nor your spouse was cov- ered for any part of the year by an employer retirement plan, you can take a deduction for total contributions to one or more of your traditional IRAs of up to the lesser of: • $5,500 ($6,500 if you are age 50 or older), or • 100% of your compensation. This limit is reduced by any contributions made to a 501(c)(18) plan on your behalf. Kay Bailey Hutchison Spousal IRA. In the case of a married couple with unequal compensation who file a joint return, the deduction for contributions to the traditional IRA of the spouse with less compensation is limited to the lesser of: 1. $5,500 ($6,500 if the spouse with the lower compen- sation is age 50 or older), or 2. The total compensation includible in the gross income of both spouses for the year reduced by the following three amounts. a. The IRA deduction for the year of the spouse with the greater compensation. b. Any designated nondeductible contribution for the year made on behalf of the spouse with the greater compensation. c. Any contributions for the year to a Roth IRA on be- half of the spouse with the greater compensation. TIP Page 10 Chapter 1 Traditional IRAs