2020 Tax Filing Extended - What You Need To Know
Apparently in 2021, the early, tax-filing bird doesn’t always get the worm.
Earlier in March, the Internal Revenue System announced they would extend the 2020 tax filing deadline to May 17, 2021 for tax filing, income payments, and also IRA contributions. However, because state deadlines may be different, taxpayers should still contact their local tax preparer or visit their individual state tax agency website to confirm new deadlines.
So has anything changed for contributing to your IRA? Besides the contribution deadline being extended to May 17th 2021, IRA contribution rules for 2020 have remained the same. In 2020, individuals can contribute up to $6,000 in each Traditional and Roth IRA (or their taxable compensation for 2020, whichever is less). Individuals over the age of 50 have larger contribution limits called “catch-up contributions”, and can contribute up to $7,000 in each IRA. Income limits may apply, so please consult with your tax preparer.
There are some limitations to the extension in regards to how you file your taxes. Estimated quarterly tax payments that were originally due on April 15, 2021 remain due on that date. Additionally, residents impacted by winter storms in Texas, Oklahoma and Louisiana still have an extended tax filing deadline of June 15, 2021.
Our clearing firm, Charles Schwab, has updated their systems to allow clients to make 2020 IRA contributions up to the new deadline. If you have any questions about your IRA contributions or would still like to make a contribution, feel free to reach out to us so we can assist you.
This general information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice and is not intended to be construed as tax advice. This information cannot be used for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions. Where specific advice is necessary or appropriate, Iowa Wealth Management recommends consulting with a qualified tax advisor or CPA.