If you're a tax enthusiast (maybe you subscribe to Tax Fancy magazine or attend Taxapalooza festivals?) or perhaps just a reluctant but informed taxpayer, you probably know that you don't have to fund your IRA for each year until April of the next year. So your IRA for 2005 can remain empty until April 17, 2006 (which is 2006's tax-filing deadline, since April 15 falls on a Saturday).

It's nice to know you can put things like that off, eh? Think twice, though. You may want to fund it now. The money that you'll be plunking into that IRA probably isn't tax-sheltered right now, but it could be. If it's sitting in a stock, for example, the gain it may generate will be taxable. Move the money into your IRA right now, and it will immediately be able to grow on a tax-deferred basis if your IRA is a traditional one. If your money is in a Roth IRA, it enters the account on a post-tax basis, and all your withdrawals, if they're made according to the guidelines, should be tax-free. It doesn't get much better than that. In addition, another beauty of the IRA is that you can buy and sell investments in it without having to pay taxes on each transaction as you go.

So how much can you invest in an IRA? Well, if you're thinking the limit is $2,000 per year, you haven't been keeping up. The limits have been raised. For tax year 2005, which is where we find ourselves at the moment, the limit is now $4,000 for those under 50. If you're 50 or older, you get an extra $500 "catch-up" contribution, for a total of $4,500. That's significant money.

Note that if your income is too high, you won't be able to take full advantage of IRA benefits. Learn more about IRAs in our IRA Center.

You can open IRA accounts with most major brokerages -- some of which are now charging as little as $5 per trade. (Check out our brokerage comparison chart and our Broker Center.) Ameritrade (NASDAQ:AMTD), for example, offers IRA accounts and charges no IRA custodian fees. It's the same with E*Trade (NYSE:ET), if you're willing to accept electronic statements and trade confirmations. According to the T. Rowe Price (NASDAQ:TROW) website, "There are no annual IRA fees for mutual fund accounts with $5,000 or more, individuals with a total of $50,000 or more, or households with $100,000 or more invested with T. Rowe Price. A low $10 fee per year is charged for each IRA mutual fund account under $5,000."

JPMorgan Chase's (NYSE:JPM) BrownCo, admired for its $5 trades, also offers IRA accounts if you meet the following qualifications:

  • At least five years of investment experience.
  • Net income of at least $40,000 a year from all sources and net worth of more than $50,000 (exclusive of family residence).
  • An initial deposit of at least $5,000 "to be applied toward current and prior year contributions, if eligible."

So shop around a little, and you'll likely find the best brokerage for you and your IRA. (If you already have an IRA at a brokerage, you can always transfer it.)

Learn more about the brokerage biz at our Discount Brokers discussion board and in these articles:

Longtime Fool contributor Selena Maranjian does not own shares of any companies mentioned in this article. JPMorgan Chase is an Income Investor pick.