Worried I messed up! What's the 2020 IRA contribution deadline for tax deduction?

I just wrapped up filing my taxes and after crunching the numbers a few different ways, I realized I could significantly boost my refund by making a 2020 contribution to my traditional IRA. My strategy was to wait until my federal refund hit my account and use those funds to make the IRA contribution. But I just read something online that's making me panic - apparently I needed to make that 2020 IRA contribution by 4/15/21! For some reason I had convinced myself I had until 5/15/21 since the filing deadline was extended this year. Now I'm freaking out because my tax return (which has already been accepted by the IRS) includes the deduction for this 2020 IRA contribution that I haven't actually made yet. What happens if I can't get my 2020 IRA contribution in before the deadline passes, but I've already claimed that deduction on my filed taxes? Am I going to get penalized or audited? Do I need to file an amendment? Really stressing out over this potential mistake.

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18 comments

Samantha Hall

•8M

You're right to be concerned, but let's clarify the situation. The deadline for 2020 IRA contributions was indeed April 15, 2021, regardless of the extended filing deadline. The IRA contribution deadline wasn't extended when the tax filing deadline was pushed back. If you've already claimed a deduction for a contribution you haven't made (and now can't make because the deadline has passed), you'll need to file an amended return (Form 1040-X) removing that deduction. This will likely reduce your refund or potentially create a balance due, depending on how much the deduction affected your tax situation. The good news is that filing an amended return proactively is much better than waiting for the IRS to discover the discrepancy, which could lead to penalties and interest on any additional tax owed. The sooner you address this, the better.

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Samantha Hall

•8M

Yes, they would likely owe money back to the IRS if the deduction significantly reduced their tax liability. The exact amount depends on their tax bracket and how large the IRA contribution deduction was. The IRS can verify IRA contributions through information reporting. Financial institutions are required to report IRA contributions on Form 5498, which is sent to both the account holder and the IRS. When the IRS processes these forms, they can match them against tax returns to identify discrepancies. This is part of their automated matching program.

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Sophia Clark

•8M

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Sophia Clark

•8M

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Katherine Harris

•8M

I just wanted to update after trying taxr.ai based on the recommendation here. It was actually really helpful! I uploaded my documents and they identified that I was still within a special exception period for my situation. The analysis showed me exactly how to document everything properly so I could still make the contribution without amending my return. Saved me from making an unnecessary amendment and potentially triggering an audit flag. Their document review caught things I completely missed!

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Joshua Wood

•8M

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Joshua Wood

•8M

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Madison Allen

•8M

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Emily Parker

•8M

Yes, you'll need to file an amended return since you claimed a deduction you weren't eligible for. Form 1040-X is what you'll need to submit. The sooner you do this, the better, as penalties and interest can accrue on any additional tax you end up owing. I would recommend not waiting for your original refund to come through before filing the amendment. The IRS is experiencing significant delays this year, and the longer you wait, the more complicated it could become. If your original refund does arrive, you'll likely need to return some portion of it when your amended return is processed.

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