1. Because They Can
The deadline to contribute to Roth IRAs for the 2016 tax year is April 17, 2017. (Usually it’s April 15, but in 2017 that date falls on a Saturday.) But your clients can contribute to their Roth IRAs for the 2017 tax year now. The sooner the contribution is made, the sooner any future investment earnings will be sheltered from taxation.
The IRS says that for the 2017 tax year, married couples filing jointly can make full Roth IRA contributions if their adjusted gross income (AGI) is $186,000 ($118,000 for single filers). Allowable contributions are reduced if the clients’ income exceeds those amounts until they are prohibited completely once married couples’ AGI reaches $196,000 ($133,000 for singles).
Some clients might be hesitant to contribute to a Roth IRA for 2017 before the end of the year because they’re concerned their income for that year may eventually exceed the eligibility limits. If they do end up making too much after contributing, it’s possible to avoid any penalty on the excess contribution if they remove the amount (and any associated earnings) before filing that year’s tax returns.