Tax Day IRA Reminder

The Internal Revenue Service today reminded people that contributions to traditional Individual Retirement Arrangements (IRAs) made by the postponed tax return due date of July 15, 2020, and are deductible on a 2019 tax return.

Taxpayers can file their 2019 tax return now and claim the deduction before the contribution is made. But the contribution must then be made by the July 15 due date of the return, not including extensions.

Most taxpayers who work and are under age 70½ at the end of 2019 are eligible to start a traditional IRA or add money to an existing account. Taxpayers can contribute to a Roth IRA at any age. Beginning with the tax year 2020, taxpayers of any age – even those over 70½ – can start a traditional IRA.

Contributions to a traditional IRA are usually tax-deductible, and withdrawals are generally taxable. Contributions to a Roth IRA are not tax-deductible, but qualified withdrawals are tax-free. Low and moderate-income taxpayers who make contributions to a traditional or Roth IRA may also qualify for the Saver's Credit.

Eligible taxpayers can usually contribute up to $6,000 to an IRA for 2019. The limit has increased to $7,000 for taxpayers aged 50 or older by the end of 2019.