IRS extends tax filing and IRA contribution deadlines

IRS extends tax filing and IRA contribution deadlines

IRS Extends Tax Filing and IRA Contribution Deadlines

Funding an IRA may be an ideal way to take advantage of less friendly market conditions

Recently the IRS extended the 2019 tax filing deadline to July 15. Likewise, they gave investors the same amount of time to contribute to an IRA for 2019. This means investors who qualify to do so have a few more months to save up some cash with which to contribute.

It’s strange to think that you can use money earned and saved in 2020 to make contributions to an IRA for 2019, but those are the times we’re living in. Contributions to a tax-deferred IRA for 2019 may reduce taxable income for that year (depends on income) potentially reducing your taxes. Contributions to a Roth IRA will not reduce taxable income for 2019; however, any gains received will be tax free for life.

With market prices down, some more than 20%, funding an IRA is an ideal way to take advantage of this otherwise negative situation. The IRS restricts who can make pretax traditional IRA contributions based on adjusted gross income. Additionally, Roth IRA contributions may be restricted if your income exceeds certain limits. So step one is checking to see if you qualify to fund an IRA. It is also important to consult your tax professional.

Francis Investment Counsel does not provide legal or tax advice. While the information presented is from sources believed reliable, we cannot guarantee its accuracy or completeness.