Getting your Trinity Audio player ready...

By Mark McGahee

Financially, many of us associate the spring with taxes — but we should also associate December with important IRA deadlines. This year, like 2020, will see a few changes and distinctions.

Dec. 31, 2021, is the deadline to take your Required Minimum Distribution from certain individual retirement accounts.

May 17, 2021, is the deadline for making 2020 annual contributions to a traditional IRA, Roth IRA, and certain other retirement accounts. This extension from the traditional April 15 deadline follows an extension of the traditional tax deadlines.

Some people may not realize when they can make their IRA contribution. You can make a yearly IRA contribution between Jan. 1 of the current year and April 15 of the next year. Accordingly, you can make your IRA contribution for 2021 any time from Jan. 1, 2021, to April 15, 2022.

Thanks to the SECURE Act, a person can open or contribute to a Traditional IRA past age 70½ as long as they have taxable income.

If you are making a 2021 IRA contribution in early 2022, you must tell the investment company hosting the IRA account for which year you are contributing. If you fail to indicate the tax year that the contribution applies to, the custodian firm may make a default assumption that the contribution is for the current year (and note exactly that to the I.R.S.).

So, write “2022 IRA contribution” or “2021 IRA contribution,” as applicable, in the memo area of your check, plainly and simply. Be sure to write your account number on the check. If you make your contribution electronically, double-check that these details are communicated.

Mark McGahee may be reached at 757-539-9465 or mmcgahee@isgva.com.