With 2021 wrapping up more than three months ago, it might seem much too late to make any changes before filing taxes. But it’s not.
You actually have until the filling deadline to make additional IRA contributions.
Whether this helps your tax cause, however, depends on a number of factors.
First, do any of your IRAs have room left for additional contributions, or are they already maxed out? If you still have options, then let’s move on to the next question: Will moving more money into IRAs put your cash reserve at a less than desirable level?
As family wealth advisors, we make sure that clients understand how their short-term financial moves could affect their long-term situation. That could even mean potential impacts on future generations. Long-term investment strategies should generally be paired with holding appropriate amounts in cash accounts. This tends to avoid nervous selling when volatility in the markets can shake investor confidence.
One more consideration—among the many that we don’t have room for here: are you likely to be in a lower tax bracket in the future, when you’re ready to withdraw from you IRA accounts? If so, now might be the time. Of course, always consult your tax professional and financial advisor when considering investment and tax-related options.
This year, every deadline seems as if it’s getting magically extended a bit. The tax filing deadline is April 18 instead of 15 for almost all. If you’re in Maine or Massachusetts where they celebrate Patriot’s Day, you have until the 19th.
This communication is for informational purposes only and should not necessarily be regarded as legal, tax, or customized financial advice or comment or as an official statement of the firm, or any agents thereof. J.L. Bainbridge & Co., Inc. is not a broker dealer and does not offer tax or legal advice. Please consult your tax or legal advisor for assistance regarding your individual situation. The views expressed in this material and in any attachment are those of the sender and do not necessarily reflect the views of the firm.
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