Yes, believe it or not, even though this is the middle of July (2020), you still have one more day until July 15th to make Deductible IRA Contributions for 2019. The Internal Revenue Service last week reminded taxpayers that contributions to their traditional Individual Retirement Arrangements made by the July 15 are deductible on a 2019 tax return, because their 2019 tax returns are not due until July 15th.
As a result of COVID-19, and enactments made subsequent thereto, taxpayers can file their 2019 tax return now and claim the deduction before the contribution is actually made, just so long as the contribution is actually made by the July 15 due date of the return, not including extensions.
Under most circumstances, taxpayers who work and were under age 70-1/2 at the end of 2019, were eligible to start a 'traditional IRA' or add money to an existing such account. In most cases these taxpayers can contribute up to $6,000 to an such a 'traditional IRA' for 2019, with taxpayers who were 50 years of age or older at the end of 2019, being eligible to contribute $7,000.
But even though the contributions for these 'traditional IRAs' maybe these amounts, the deduction for these contributions will depend upon the modified adjusted gross income of the taxpayer if the taxpayer is covered by a workplace retirement plan. Be certain to consult with your tax advisor or tax preparer for details regarding your contribution deduction eligibility.
Starting with 2020, taxpayers of any age, including those over 70-1/2 cam start a 'traditional IRA', but that's the subject for a future article either here, or in Tax Practice News.
So, if you have been wondering if you can reduce your tax burden due on July 15, or improve your retirement savings, when you read this just remember the deadline hasn't passed... one more day to go...just give your 'tax preparer' a shout and say, let's get me a new, bigger or better IRA in the next 24 hours.