I Owe on My 2021 Taxes, Is It Too Late for Any Deductions?
For 2021, the total contributions you make each year to all of your traditional IRAs and Roth IRAs can’t be more than:
- $6,000 ($7,000 if you’re age 50 or older), or
- If less, your taxable compensation for the year
Therefore, if you need to make a deductible contribution to your 2021 traditional IRA, you have until April 18, 2022 to make that contribution and still receive a deduction on your 2021 taxes. Make sure you specify to your agent that it’s for tax year 2021.
What’s the Difference Between a Traditional vs. A Roth IRA?
A traditional IRA is a tax-advantaged personal savings plan where contributions may be tax deductible. A Roth IRA is a tax-advantaged personal savings plan where contributions are not deductible but qualified distributions may be tax free.
If you changed jobs, you may rollover an IRA into another account instead of taking a taxable distribution.
If you have any questions, reach out to your local tax professionals at Meadville Tax Service at 814-333-2488 or email at info@meadvilletaxservice.com
