A Reminder of IRA, Roth, or Backdoor Roth Contribution

Please don’t miss out on the opportunity to maximize your IRA contribution for the 2020 tax year.

Funding your IRA prior to April 15, 2021 may help you qualify for tax benefits and potentially increase your opportunity for higher returns.  Even if you have maxed out your 401(k), an IRA is another easy way to add to your retirement savings.

In accordance to the SECURE Act, there is no longer an age limit to fund your IRA if you have earned income. Total annual contributions to a Traditional IRA, Roth IRA, or both cannot be more than the annual maximum (below) or 100% of earned income, whichever is less.

2020 and 2021 tax year maximum annual contribution for IRA & Roth IRA:

  • $6,000 if you’re under the age of 50
  • $7,000 if you’re 50 or older within that particular tax year

What is a backdoor Roth IRA?

If you are a high-income earner, FIS can help you take advantage of a backdoor Roth IRA.  A backdoor Roth IRA is a legal way to get around the income limits that normally restrict high earners from contributing to a Roth IRA.  A backdoor Roth IRA is not a tax dodge—in fact, it might even incur higher taxes when it’s established—but this IRS-sanctioned strategy can provide the investor with the future tax savings of a Roth account.

If you are interested in funding your IRA prior to the 2020 tax deadline, please contact us to help assist you with your contribution.

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