Mike Hennessy, founder and CEO of financial advisory firm Harbor Crest Wealth Advisors in Fort Lauderdale, Florida, spoke with U.S. News & World Report for this May 2020 article "How to Make a Last-Minute IRA Contribution."
With the deadline to make an individual retirement account contribution extended to July 15, 2020, Hennessy, CFA, CFP®, and other certified financial planners discussed why people should make last-minute IRA contributions (if they haven't made a contribution yet or haven't maxed their contribution and have the available funds).
Benefits of making a last-minute IRA contribution include reducing one's 2019 tax bill; deferring income tax on future investment gains; buying while the market is down; creating tax-free retirement income with a Roth IRA; using one's tax refund to fund an IRA; and qualifying for the saver's credit.
“If you try to make a 2019 contribution today, make sure that the contribution is coded as a 2019, and not a 2020 contribution,” said Mike Hennessy. “Make sure your custodian can, knows how to and will confirm your contribution is indeed a 2019 contribution.” This is especially important because IRA providers are allowed to automatically count the deposit toward the calendar year in which it is received unless one indicates otherwise.
Learn more about how you can reduce your 2019 tax bill by saving in an IRA in the U.S. News & World Report article here.
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