WAXHAW, NC – The federal income tax filing deadline has been extended for individual taxpayers from April 15 to May 17 – so you’ve got an extra month to contribute to some tax-advantaged investments for the 2020 tax year.
You can put up to $6,000 into your IRA, or $7,000 if you’re 50 or older. With a traditional IRA, your contributions are generally tax deductible. Roth IRA contributions are not deductible, but earnings can grow tax-free if you meet certain conditions.
If you’re self-employed, or a small business owner who files as a sole proprietor, you’ve got an extra month to contribute to your SEP IRA. Consult your tax advisor to determine how much you can contribute and how much can be deducted from your taxes.
Also, if you withdrew funds from your IRA or 401(k) last year under the special rules enacted for COVID-19 and you “recontribute” some of the money before the new May 17 deadline, you can exclude this recontribution from your taxes. Any amount you don’t recontribute will generally be taxable over three years.
The new deadline gives you some opportunities – try to take advantage of them.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.
Dylan Hales – Edward Jones Financial Advisor – (704) 684-0103