UPDATE: You now have until May 17, 2021 to fund these plans since the IRS tax filing deadline was extended
At Aspyre Wealth Partners®, we partner with clients to help them live their best life! This means making incremental progress towards short term but also long term goals like retirement. Annual funding of an Individual Retirement Account (IRA), a ROTH IRA, and/or a Health Savings Account can help you stay on track with your long term goals.
When preparing for your tax return this year, please don’t forget that the deadline to make HSA (Health Savings Account) and IRA (both Traditional and Roth) contributions for 2020 was originally April 15, 2021, but has now been extended to May 17, 2021.
HSA Contributions
Any individual who has participated in a Qualified High Deductible Health Plan (HDHP), that is HSA eligible in 2020, can contribute to an HSA. If you are not sure if your health insurance plan is HSA eligible, please check with your employer or insurance provider. For HSA accounts through an employer, the employee, the employer, or both can contribute in the same year. For an individual HSA, family members or any other person may also make contributions on behalf of the eligible individual. These contributions must be made in cash, as stock or property contributions are not allowed. For 2020, the contribution amount for an individual HDHP participant is $3,550 ($4,550 if you are age 55 or older). If you have family HDHP coverage, you can contribute up to $7,100 ($8,100 if you are age 55 or older). Remember, these limits include all contributions, including employer contributions. For more information, please visit irs.gov.
IRA Contributions
For 2020, your total contributions to all of your traditional and Roth IRAs cannot exceed $6,000 ($7,000 if you are age 50 or older) or your taxable compensation for the year, whichever is less. These limits do not apply to rollover contributions or qualified reservist repayments. Roth IRA contributions may be limited based on your tax filing status and income.
Your traditional IRA contributions may be tax-deductible, however the deduction may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels.
Contributions that are made in excess to these limits are taxed at 6 percent per year as long as the excess amounts remain in the IRA. To avoid excess taxes, withdraw any excess contributions from your IRA by April 15 (or extension date) and withdraw any income earned on the excess contribution. Click here for more information.
For questions about your HSA and/or IRA contributions, visit our website at aspyrewealth.com, or call (913) 345-1881.