Deadline for 2019 IRA Contributions

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  • #5362
    esetter
    Participant

    The filing date for 2019 tax returns has been extended until July 15, 2020. Has the deadline for making 2019 IRA contributions also been extended or is it still April 15?

    #5363
    Alan S.
    Participant

    It will be 7/15 per the tax code since the IRA contribution deadline is the due date for filing the prior year return. However, it is possible that your custodian’s processing platform will not have been updated to accept contributions after 4/15 shortly after 4/15, so it’s a good idea to check with the custodian closer to 4/15.

    And those same systems may automatically flag any contributions after 4/15 as 2020 contributions, so be very careful flag all contributions made after 4/15 to be 2019 contributions, then verify that your account shows a 2019 contribution.

    • This reply was modified 1 year, 6 months ago by Alan S..
    #5366
    Bruce1950
    Participant

    Alan
    Thanks for answering before I asked.
    I’m reading the IRS IR 2020-58 to say the ‘Filing Deadline’ is extended to July 15, which is different than allowing for a penalty free extension of time to file, as might happen during a natural disaster. And Pub 590-A is clear, IRA contributions may be made by the tax filing deadline, excluding extensions…and the new rulings says July 15 is the new filing deadline. Hence, IRA contributions will be extended.

    Even if the custodian doesn’t identify the IRA contribution as being for 2019, the IRA owner can still do it. But it will be important for such custodians to correct this as their 5498 will be wrong as will their identification of another 2020 contribution (made for 2020) as an excess contribution for 2020.

    BruceM

    #5371
    Alan S.
    Participant

    Am starting to rethink this, since the lack of clarity from the IRS is strange. Could be they are checking with custodians if their systems can be programmed in time to reflect the new deadline, and if enough indicate this is a problem, maybe the IRS holds the contribution deadline to 4/15.

    #5372
    esetter
    Participant

    My Vanguard representative told me that Vanguard was studying the issue, but not (currently, at least), prepared to accept 2019 contributions after April 15.

    #5373
    Alan S.
    Participant

    The IRS just clarified this, and 2019 IRA and HSA contributions can be made through 7/15. You should still check with your custodian that they can handle this correctly before trying to make a 2019 contribution after 4/15. Here is the IRS release:
    https://www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers

    #5374
    esetter
    Participant

    Thank you again Alan (and others who responded to my question). Today, Vanguard confirmed that 2019 IRA contributions could be made up to July 15.

    #5375
    Alan S.
    Participant

    For VG to issue this guidance, they are apparently confident that they can get their systems updated to support whatever reporting guidelines the IRS comes up with. Basically, I believe that the IRS will either want the 5498 cycle extended, or will want the 5498 forms filed in May as usual and then will require the late contributions to be reported under a disaster code on the 2020 5498.

    #5376
    esetter
    Participant

    This was the last response to my secure messages to my Vanguard representative:

    “I spent some time calling some of our experts in the area of retirement
    issues. They have come back with the guidance that you can, in fact, make
    a contribution up to July 15, 2020 into your IRA. In speaking with our
    systems group, Vanguard cannot guarantee that vanguard.com will be able to
    be updated by April 15th deadline; however, we have contingency processes
    in place to be able to process these prior-year contributions up to the
    July 15th deadline and align the tax reporting accordingly.

    Thank you for reaching out on this issue. I appreciate your understanding
    as we continue to analyze the changes being made and pivot to address the
    associates changes.

    Sincerely,

    xxxxxxx
    Relationship Manager
    Vanguard Flagship Services”

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