The IRS has issued a reminder that it may still be possible to claim a deduction for 2021 for contributions to IRAs—but the clock is ticking. Contributions that could be claimed must have been made by April 18, 2022.
Contributions for 2021 can be made to a traditional or Roth IRA until the filing due date—Monday, April 18, 2022 for most taxpayers—but must be designated for 2021 to the financial institution.
About that Due Date
The due date is April 18 instead of April 15 because of the Emancipation Day holiday in the District of Columbia (by law, Washington, D.C., holidays affect tax deadlines for everyone in the same way federal holidays do) for everyone except taxpayers who live in Maine or Massachusetts; taxpayers in those states have until April 19, 2022, to file their returns due to the Patriots’ Day holiday in those states. Taxpayers requesting an extension have until Monday, Oct. 17, 2022, to file.
About the Contributions
Generally, eligible taxpayers can contribute up to $6,000 to an IRA for 2021; however, that limit is $7,000 for those 50 years of age or older at the end of 2021. Qualified contributions to one or more traditional IRAs may be deductible up to the contribution limit or 100% of the taxpayer’s compensation, whichever is less. There is no longer a maximum age for making IRA contributions.
Those who make contributions to certain employer retirement plans, such as an IRA, 401(k) or 403(b) or an Achieving a Better Life Experience (ABLE) account, may be able to claim the Saver’s Credit. Also known as the Retirement Savings Contributions Credit, the amount of the credit is generally based on the amount of contributions, the adjusted gross income and the taxpayer’s filing status. The lower the taxpayer’s income (or joint income, if applicable), the higher the amount of the tax credit.
- Log in to post comments