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The deadline for filing your tax return — April 15 — isn’t the only tax-season deadline.

The IRS imposes various deadlines on tax-advantaged accounts — including individual retirement accounts (IRAs).

Individual retirement accounts (IRAs) are one of most common ways people save for retirement. The two most frequent questions raised about IRAs are, "How much can I contribute every year?" and "What's the deadline for my annual contribution?"

IRA 2018 and 2019 Contribution Limits

Here are the annual IRA contribution limits for 2018 and 2019:

2018

·      Age 49 and younger: $5,500

·      Age 50 and older: $6,500

2019

·      Age 49 and under: $6,000

·      Age 50 and over: $7,000

To make a contribution, you have to be eligible, which means you must either:

·      Have earned income, or

·      Have a spouse with earned income and file a joint tax return.

If you have more than one IRA (i.e., a traditional and a Roth), your total combined contribution to all your accounts cannot exceed the above limits.

IRA 2018 Contribution Deadline

The deadline to make your yearly IRA contribution is April 15 of the following year.

Remember, you can contribute to your IRA any time. For example, you can make your 2018 contribution any time between Jan. 1, 2018, and April 15, 2019. And the earlier you contribute, the more time your money will have to benefit from potential growth.

For more details about IRA requirements, visit the IRS website.

Traditional vs Roth IRA

Traditional IRAs must be established by the tax filing deadline (without extensions) for the tax year in which your qualifying contribution(s) will apply. Applications postmarked by this date (2018 is 4/15/2019) will be accepted.

  • Taxable compensation is required to make Traditional IRA contributions. An individual can contribute 100% of their taxable compensation up to the contribution limit. Taxable compensation is generally defined as income from wages, salaries, tips or other taxable employee pay. It does not include interest or dividend income, retirement income, social security, unemployment, child support or alimony.
  • Contributions to a Traditional IRA end at age 70½.
  • The IRA contribution limit does not apply to rollovers, transfers, and qualified reservist repayments.

Roth IRAsmust be established by the tax filing deadline (without extensions) for the tax year in which your qualifying contribution(s) will apply. Applications postmarked by this date (4/15/2019 for the 2018 tax year, and 4/15/2020 for the 2019 tax year) will be accepted.

  • Taxable compensation is required to make Roth IRA contributions. An individual can contribute 100% of their taxable compensation up to the contribution limit. Taxable compensation is generally defined as income from wages, salaries, tips, or other taxable employee pay. It does not include interest or dividend income, retirement income, social security, unemployment, child support or alimony.
  • The AGI phase-out range for taxpayers making contributions to a Roth IRA in 2018 is $189,000 to $199,000 for married couples filing jointly.
  • For singles and heads of household, the income phase-out range for 2018 is $120,000 to $135,000.
  • For a married individual filing a separate return, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 - $10,000.
  • Contributions to a Roth IRA are not tax deductible.
  • Contribute to a Roth IRA at any age.
  • The IRA contribution limit does not apply to rollovers, transfers, and qualified reservist repayments.

Don't Miss Out

An IRA can be an essential part of your retirement savings plan. They offer a tax-advantaged way to help build your retirement nest egg. Even if you already have a retirement plan, you can contribute to an IRA.

Help prepare for your financial future. Contact Jaffe Tilchin today at 813-960-5293 to find out more about Traditional and Roth IRAs. We are not accountants or accounting advisors, please refer to your tax preparers about tax implications regarding IRAs.

Posted 5:11 PM

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NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
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