I’m a glass-half-full type of person. Even in the current craziness resulting from the coronavirus, I try to find a few silver linings.
Here’s one: Tax Day, which is traditionally April 15, has been pushed back to July 15 this year. This provides a great opportunity to make lemonade out of lemons.
Here are three tips to take advantage of the later tax-filing deadline:
- Sock away more money in your IRA. Since Tax Day is pushed back, you now can make contributions for the 2019 tax year to your traditional or Roth IRA up until July 15. The fact that the markets have dropped and most stocks are cheap makes this an even more attractive option. And, if you have a SEP IRA or a Keogh plan and file for an October 15 extension, you have until that date to make 2019 contributions.
- Convert your traditional IRA to a Roth IRA. As I mentioned above, many stocks now have bargain-basement prices. While that may cause you to flinch when you check your account balance, it also means that you’ll pay less in income taxes now if you convert some of the money in your traditional IRA to a Roth. You remember how much we like Roths around here, right?
- Stash some extra money in your Health Savings Account (HSA). If you have a high-deductible health plan, you’re eligible for an HSA. And the later tax filing due date means that you can boost your HSA contributions for 2019. Why should you care about HSAs? Well, they aren’t called a “retirement triple-threat” for nothing.
Speaking of retirement—do you have concerns about how your retirement savings will hold up in this market? Were you planning to retire this year, but are now thinking of postponing it? Let us provide you with some peace of mind. Our financial advisors can help you make sense of how your retirement might be affected by coronavirus. Click here to request a no-cost, no-obligation consultation.