Tax Preparation & Roth IRA’s

It’s the beginning of the year, Christmas and New Years have been celebrated and there isn’t another holiday for months. With no looming distractions, now is the perfect time to ensure you have all of your tax documents in order, as well as be on the lookout for any documents that may arrive by mail. Most documents are available either immediately or will be ready for review by the end of January. These documents may include:

Wage and income statements (such as W-2 or 1099’s)
Health Insurance statements (such as Form 1095)
Proof of qualifying educational expenses (such as Form 1098-T)
Mortgage interest statements
Retirement distribution statements
Investment account statements
Charity donation receipts

Now that 2021 is over and 2022 is beginning, you may think that you are done with your tax adjustments. However, if you have a Roth IRA, you can still contribute up to $6,000; if you are over 50, you can contribute up to $7,000. You can contribute to your Roth IRA until April 15th (Tax Day). Some additional things to know about your Roth IRA:

You may add funds until April 2022, but you can only use 2021 income (i.e. end of year bonuses)
Even if you file your tax return early, you may still add funds to your Roth IRA up until tax day
If you file for an extension, your tax return would be due October 15th, but you may still only add funds to your Roth IRA until April 15th
You may contribute to your Roth IRA after filing your taxes without needing to amend your tax return

With a deadline for contributing to your Roth IRA of April 15th, these extra months may be especially helpful for those that:

Didn’t make a contribution last year
May not have had the funds to contribute
Had unexpected funds late in the year to contribute
Recently learned about Roth IRA’s and want to make a contribution for the previous tax year

If you have questions regarding what tax documents you need or about your Roth IRA, call our tax experts and let us answer any questions you may have.