After a globally challenging 2020, investors have received extra time this year to make their IRA contributions. Annual retirement contribution deadlines coincide with the federal income tax deadline, usually April 15, but following the disruption of the coronavirus pandemic the IRS has provided a filing extension to May 17, 2021. In addition to this extension, residents of Louisiana, Oklahoma and Texas qualify for a disaster area relief extension of June 15.
What does this extension mean for IRA investors? Additional time to make those 2020 prior-year contributions. Many faced economic uncertainty in 2020, and this extension is good news for anyone who hasn’t yet maxed out their 2020 IRA contributions.
The extension has also given investors more time to look at global markets and consider diversification options before maxing out their 2020 contributions. For example, we’ve previously highlighted the economic strength of New Zealand and Australia and how the U.S.-based Commonwealth Australia-New Zealand Fund can provide an opportunity to invest in companies that are benefiting from the economic rebuilding post-coronavirus.
Both traditional and Roth IRA account holders can take advantage of this extra time to research diversification options and make prior-year contributions until May 17, or June 15 in applicable states. For self-employed or small business owners who have SEP or SIMPLE IRAs, contributions can be made up until the due date (including extensions), of the federal income tax return.
Those with Commonwealth Funds accounts can set up links to their bank to draft contributions or they can also mail contributions to the IRA custodian. When sending physical deposits, make sure to clearly mark the deposit as a prior-year contribution for 2020. Otherwise, it could mistakenly be applied to 2021. As long as the deposit is postmarked before the May 17 deadline (or the June 15 deadline, if applicable), it will be applied to tax year 2020.
To find out more about 2020 IRA contributions, or to explore international investment options for retirement accounts, contact Shareholder Services at 888.345.1898.
Ultimus Fund Distributors, LLC does not provide tax advice. Please consult your tax advisor before making any decisions or taking any action based on this information. Investing involves risk, including loss of principal. Investments in international markets present special risks, including currency fluctuation, the potential for diplomatic and political instability, regulatory and liquidity risks, foreign taxation, and differences in auditing and other financial standards. Risks of foreign investing are generally intensified for investments in emerging markets. There is no guarantee that this, or any, investing strategy will achieve its objectives. Diversification does not ensure a profit or guarantee against loss.