The IRS has extended the deadline to make contributions into your Traditional and Roth IRA’s for 2020 to May 17th.
If you don’t know what a Traditional and Roth IRA are, they are tax-advantaged retirement accounts.
A Roth IRA is a post-tax account meaning that your contributions have already been taxed before entering your account. This also means that when you begin withdrawing funds it’s all TAX FREE.
A Traditional IRA is a pre-tax account meaning that your contributions are taxed after they go into your account. This allows for a deduction on your annual tax return, therefore lowering your total taxable income.
An extension on these deadlines is great because now you have an extra month to contribute into your Roth or Traditional, and if you make Traditional contributions, you have an opportunity to take a deduction and lower your total taxable income for 2020!
If you’re new to these topics, do your research on which account is better for YOUR needs. As always, we’re happy to help if you need any guidance.