• Michael Schreiber

2021 Tax Filing Deadline is Approaching!



Taxpayers still have a week to file their taxes this year, which means you may have some time to cut your tax bill with a contribution to a retirement account. The federal income tax filing deadline for most individuals is Monday, April 18, 2022, because of the Emancipation Day holiday in Washington, D.C. Taxpayers in Massachusetts and Maine have until April 19, 2022, because of the Patriot’s Day holiday. You have until the tax filing deadline to make an IRA contribution – up to $6,000 for an individual and $7,000 for people who were 50 or older at the end of 2021. You may also be able to contribute to an IRA for your spouse for 2021, even if your spouse didn’t have any income.

IRA Contributions: Deadlines & Eligibility

 

You have until your tax filing due date (not including extensions) to contribute up to $6,000 for 2021 ($7,000 if you were age 50 or older on December 31, 2021). For most taxpayers, the tax filing deadline is April 18, 2022.

 

Traditional IRA

  • Anyone that is working and has earned income can contribute to a Traditional IRA, regardless of age.

  • You have until the tax filing deadline to make an IRA contribution – up to $6,000 for an individual and $7,000 for people who were 50 or older at the end of 2021. You may also be able to contribute to an IRA for your spouse for 2021, even if your spouse didn’t have any income.

  • Whether or not you can make a deductible contribution depends on whether or not you have a workplace retirement plan and if your income exceeds certain levels. Deduction information can be found on the IRS website.

  • Fidelity has a helpful IRA contribution calculator to find out whether a Traditional or Roth IRA might be right for you, based on how much you are eligible to contribute and the amount you might be able to deduct on your taxes.

  • Even if you can't make a deductible contribution to a traditional IRA, you can always make a nondeductible (after-tax) contribution, regardless of your income level.

Roth IRA

  • The deadline for contributing to a Roth IRA for 2021 is also April 18 — but since you don’t get a tax deduction for depositing money into a Roth, it won’t lower your tax bill. There are contribution limits based on your household and filing status, and if your earned income is too high, you cannot contribute at all.

SEP IRA and Solo 401(k)

  • Self-employed individuals can put more of their earnings away by contributing to a Simplified Employee Pension plan, or a SEP IRA. The 2021 contribution limit is 25 percent of your compensation or $58,000 — whichever is less. If you are unable to file your taxes by the April due date and are filing for an extension, you have until then to make a SEP contribution.

  • Self-employed business owners who opened a Solo 401(k) before December 31, 2021, can contribute by the business tax return due date, including extensions. When adding employee and employer contributions together, the maximum contribution for 2021 is $58,000, or $64,500 if you are age 50 or older.

With only a week or so to go, please contact the Aevitas team as soon as possible if you would still like to make a contribution before the deadline. We are here to answer any questions you may have and always appreciate hearing from you!



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