Tax Tip: You can still contribute to your 2019 IRA
Updated: Jul 20, 2020
The CARES Act has delayed the IRS 2019 tax filing deadline to July 15th, 2020. If you have taken advantage of the delay and still have not filed your tax return for 2019 then there is more good news: you can still contribute to an IRA for 2019. It can be a good way to reduce your taxes and sock away more for retirement. Here is a quick reminder of the IRA rules so you can consider if an IRA contribution will make sense for you.
Under IRS rules you can make your 2019 IRA contributions up to the filing deadline or when you actually file, whichever comes first. Since the the IRS extended the filing deadline, they are also providing an extension of time to make that 2019 IRA contribution.
The total contribution limit for 2019 and 2020 is:
· $6,000 if you are under age 50
· $7,000 if you are age 50 or older
Also remember that you must have earned income to be eligible for an IRA contribution.
Remember that you can always make a non-deductible contribution, but your IRA does not always provide a tax deduction and unfortunately the rules for deductibility can be quite complex. Check with your tax advisor or use one of the functions in Turbotax to see how much the IRA contribution will save you. If you don’t have access to one of those options, then here is a table that may help you:
If you are covered by a retirement plan at work:
If you are not covered by a retirement plan at work:
If you are interested in opening an IRA or would like to talk with someone to determine whether an IRA makes sense for you, please give us a call. We would be happy to help!