It’s tax time and if you haven’t filed yet, you’re probably wondering whether you will be receiving a refund or owing more. Many are uncertain about how the new tax laws will affect them. Don’t confuse a change in your refund with a change in your total tax liability. The key is to compare taxes paid in 2017 to taxes paid in 2018 – that (not your refund) will tell you how the tax law affected your household.
April 15th is the deadline to fund your Roth IRA, SEP IRA and Traditional IRA for tax year 2018. If your taxes are prepared by a professional make sure both your advisor and tax preparer know what you have decided to do in terms of contributions. If you prepare your taxes yourself, and determine that you can contribute to a Roth or IRA, make sure you do so BEFORE the 15th. Most payments must be posted or postmarked by the 15th. Every investment firm may have different deadlines depending on the custodian (place your investments are held) so double check. And DON’T WAIT!! Make sure it’s done as soon as possible to prevent any errors. The last thing you want is to have to refile your taxes.
For SEP IRA’s (Self Employed Plan) you do have an extension if you filed for an extension on your taxes. IRA’s and Roth IRA’s DO NOT have an extension. They must be deposited by the 15th of April, regardless of whether you filed an extension.
Don’t assume you contributions are done automatically –call and make sure you have made those contributions and that they correspond to what is filled out on your tax form. Forms from custodians that verify your contributions aren’t mailed until May, but it’s too late to change anything by then. The maximum contribution for 2018 is $5,500 for Roth and IRA contributions, increasing by $500/year to $6,000 for 2019.