JustinCEO Topic

JustinCEO · April 1, 2023, 7:23pm

Continuing the discussion from ChatGPT and Current AIs Are Dumb:

I asked it:

What is the deadline for making IRA contributions for the 2022 tax year?

It answered:

The deadline for making contributions to a Traditional or Roth IRA for the 2022 tax year is April 15, 2023. It’s important to note that the deadline is not extended if April 15 falls on a weekend or holiday.

However, if you are self-employed and file an extension for your individual tax return, the deadline for making contributions to a Traditional or Roth IRA is also extended to October 15, 2023.

It’s also worth noting that you can make contributions to a Traditional or Roth IRA at any time during the tax year or up until the deadline for that year’s contributions. So, you don’t have to wait until the deadline to make your contribution. In fact, making regular contributions throughout the year can help you maximize the potential growth of your retirement savings.

I am pretty sure the middle paragraph is wrong. You don’t get an IRA contribution deadline extension, even when you get a tax return extension.

Got curious about this since it’s professionally relevant and I didn’t super confidently know the answer. After looking into it, I think perhaps ChatGPT is “thinking” of a SEP-IRA but it misapplied that info to Trad IRAs & Roths

When must I deposit the contributions into the SEP-IRAs?

You must deposit contributions for a year by the due date (including extensions) for filing your federal income tax return for the year. If you obtain an extension for filing your tax return, you have until the end of that extension period to deposit the contribution, regardless of when you actually file the return.

Somewhat relatedly, it’s apparently very common for people to think that getting an extension to file their taxes also delays their obligation to pay their taxes. That is not how it works. You still have to pay your taxes by the deadline, even with an extension. There are separate penalties for failure to file and failure to pay.

On the general topic of software tools spitting out bad information, check out what Bing showed me for “sep ira contribution deadline with extension”.