Tax News What The Coronavirus Relief and New Tax Deadline Mean for Your IRA Contributions Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by TurboTaxLisa Published Mar 30, 2021 - [Updated Mar 31, 2021] 2 min read In response to coronavirus (COVID-19), the Treasury and the IRS recently announced changes to the tax deadline. The federal tax filing deadline has been extended to May 17, 2021. Taxpayers getting a refund are encouraged to file their taxes now to get their money in this time of need. This also means that you have until May 17, 2021 to make a 2020 contribution to your IRA and make an impact on your taxes. We’ve summed up what this deadline extension means for you below. Extended Deadline for 2020 IRA Contributions and Workplace-Based Retirement Plans Typically you can make an IRA contribution for the tax year up until the April tax deadline and make an impact on your taxes. For example, the IRS allows you to make a 2020 IRA contribution up until the tax deadline and possibly get a deduction on your tax year 2020 taxes. Because the federal tax filing deadline has been extended to May 17, 2021, the deadline for making a 2020 IRA contribution is now also extended to May 17, 2021. Extended Deadline for Tax Owed on Gross Income from IRA/Work-Based Retirement Plan Distributions If you owe 10% additional tax on amounts includible in gross income from an early distribution that you took from your IRA or workplace-based retirement plan in 2020, the reporting and payment of the 10% additional tax has been extended to May 17, 2021. This is because the additional tax is calculated, reported, and paid at the same time as the income tax owed on the amounts includible in gross income. If you file before May 17, the 10% additional tax will be calculated at the time you file since it is calculated with your tax filing. If you took a coronavirus related distribution under the CARES Act in 2020, there is a waiver of the 10% penalty if you were impacted by coronavirus, and your distribution can be included in your taxable income over three years instead of all in tax year 2020, lowering your taxable income. TurboTax Has You Covered You can be confident that TurboTax is ready to help you stay informed and file now up until the extended May 17, 2021 federal deadline. Additionally, our team of TurboTax Live tax experts are available on-demand to help you out should you have any questions along the way. TurboTax Live tax experts can also do your taxes for you from start to finish, all from the comfort of your home. As the IRS continues to issue additional guidance on COVID-19 tax relief, we will continue to keep you updated. Check back here for the most up to date news and information. Previous Post Where’s My Third Stimulus Check? Next Post IRS Announced Federal Tax Filing and Payment Deadline Extension Written by Lisa Greene-Lewis Lisa has over 20 years of experience in tax preparation. Her success is attributed to being able to interpret tax laws and help clients better understand them. She has held positions as a public auditor, controller, and operations manager. Lisa has appeared on the Steve Harvey Show, the Ellen Show, and major news broadcast to break down tax laws and help taxpayers understand what tax laws mean to them. For Lisa, getting timely and accurate information out to taxpayers to help them keep more of their money is paramount. More from Lisa Greene-Lewis Follow Lisa Greene-Lewis on Twitter. Leave a ReplyCancel reply Browse Related Articles Tax Planning TurboTax Enables Refund Advance to Taxpayers Investments Tax Benefits of Real Estate Investing Self-Employed Business Tax Checklist: What You’ll Need When Filing Uncategorized What Is Deferred Compensation & How Is It Taxed? Investments How Does an Inherited IRA Work? Work Choosing Your Business Structure: 5 Types of Businesses… Tax Deductions and Credits Are HOA Fees Tax Deductible? What You Need to Know Crypto Understanding Crypto and Capital Gains Work 7 Things You Need to Know About the New Business Report… Work Using Form 8829 to Write-Off Business Use of Your Home