The July 15 tax deadline is quickly approaching, which means you only have a couple weeks left to make contributions to your Individual Retirement and Health Savings Accounts. Here are a few eligibility requirements to keep in mind:
- The maximum IRA contribution allowed for 2019 is $6,000. If you’re 50 years of age or older you can contribute an additional $1,000 or $7,000 for the year.
- The maximum amount you can contribute to an HSA is $3,500 for individual coverage or $7,000 for family coverage.
- Before January 1, 2020, taxpayers who were 70 ½ years of age were not able to contribute to a traditional IRA. This age limit no longer applies and helps individuals save more toward retirement.
Thanks to the CARES Act, taxpayers are granted rollover relief in 2020 for Required Minimum Distributions (RMD). Here’s what you need to know.
- If you took a required minimum distribution this year, you can roll those funds back into a retirement account. The 60-day rollover period for those distributions has been extended to Aug. 31, 2020.
- RMDs due in 2020 can be skipped if they’re from a defined-contribution retirement plan.
- If you already received a distribution in 2020 from an IRA that would have been an RMD, you have until Aug. 31, 2020 to repay the distribution.
As you continue to make contributions, be sure to work with a tax-integrated financial planning team – like us at Carey & Hanna – to make sure you meet all of the eligibility requirements and are maximizing opportunities to plan for the future.
Sources
- https://www.forbes.com/sites/ashleaebeling/2020/03/24/ira--hsa-contribution-deadlines-extended-due-to-coronavirus/#7235621d3808
- https://www.accountingtoday.com/news/rmd-rollover-relief-granted-under-cares-act?utm_campaign=accountingtoday-li&utm_source=linkedin&utm_medium=social&utm_content=socialflow