People have extra time to tuck cash into their IRA this tax season, now that the income-tax submitting deadline has been postponed a month.
Almost two weeks after the Internal Revenue Service extended this year’s federal income-tax filing deadline to May 17, the tax-collection company on Monday stated the deadline for 2020 contributions to particular person retirement accounts (IRAs) and well being financial savings accounts (HSAs) is additionally May 17.
The 2020 contribution end dates for each sorts of accounts would have been April 15, like the income-tax submitting deadline earlier than it was pushed again.
An individual below age 50 can contribute $6,000 to their IRA, and a individual 50 and above can contribute as much as $7,000. Those contributions is perhaps totally or partially deductible, relying on the taxpayer’s revenue and their entry to a retirement plan by means of their employer, in response to IRS rules.
An individual with a well being financial savings account can contribute $3,550 for particular person protection and $7,100 for household protection. Health financial savings accounts are paired with a high-deductible well being plan, the place the deductible is at the least $1,400 for a person and $2,800 for a household. An individual’s contributions to the account are deductible.
The May 17 deadline is the end date to pay any taxes due in the 2020 tax 12 months. A taxpayer can get an extension to file a return by means of Oct. 15.
The IRS nudged again different deadlines to May 17 from April 15, together with the three-year deadline to file a tax return and acquire an unclaimed refund. Money that goes unclaimed previous the three-year window reverts again to the Treasury Department, the IRS famous.
But the IRS reiterated Monday it was not postponing the first spherical of estimated 2021 tax funds. These funds are nonetheless due April 15, the company famous.
Gig employees, freelancers and self-employed enterprise house owners are a few of the individuals who pay 4 rounds of estimated tax funds. While employers commonly withhold cash for revenue taxes from every paycheck, self-employed taxpayers must pay taxes as they go, through estimated funds. Paying too little alongside the approach would possibly end in penalties.