As a result of the COVID-19 pandemic, U.S. Treasury Secretary Steve Mnuchin extended the 2019 tax filing date to July 15.  As a result, it also extends the deadline for making a 2019 contribution to your Individual Retirement Account (IRA) or Roth IRA. You now have until July 15 to make last year’s contributions. According to the Internal Revenue Code, contributions are considered to be made during a given taxable year as long as they are made by the filing deadline.

Even in normal times, many people wait until the last minute to make their previous year IRA contributions. Given current circumstances, it might be tough to get those deposits made with so many institutions closed or working with skeleton crews.

One thing to watch out for. If you make an IRA or Roth contribution for 2019 after April 15 but by July 15, make sure the contribution is earmarked for 2019. Some financial institutions may have systems in place to code any IRA contribution made after April 15, 2020 as a 2020 IRA contribution. To avoid any confusion, write “2019 IRA contribution” in the memo section of your check. Then, check and double-check with the financial institution and your adviser to make sure your contribution was properly coded.

Financial expert Ed Slott suggests making your 2019 IRA contribution by April 15 if possible, in spite of the extension, so there is no confusion about your contribution. And he says, “For Roth IRAs in particular, given the recent downturn in the market, it could be beneficial to get the cash in as soon as possible so the money can grow, tax-free, when the market does eventually rebound.

2019 IRA contribution limits still apply. If you’re under the age of 50 the limit is $6,000. For those 50 and over the limit is $7,000.

The 2019 IRA contribution extension does not apply to 401(k) accounts.

 

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