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I can’t fund the IRA I put on my tax return. What can I do?

By Karin Price Mueller | for

Q. On my 2019 tax return, I took the tax credit for a traditional IRA contribution in advance of making the contribution. My intention was to make the $6,000 contribution by April 15, 2020. Then COVID-19 hit. I lost my job. I'm on unemployment with an uncertain financial situation. With the new July 15 tax filing deadline looming, I don't have the money for the contribution. Is the IRS making exceptions for this situation in light of these uncertain times? If not, what penalties will I face?

— Unemployed

A. We understand how times have changed for so many people since the coronavirus pandemic began.

And while we’re always supportive of saving for retirement, paying the bills today is more important.

According to IRS Publication 17, “Your Federal Income Tax,” you can file your return claiming a traditional IRA contribution before the contribution is actually made.

Generally, the contribution must be made by the due date of your return, not including extensions, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.

He said your 2019 federal income tax return’s due date is July 15, 2020. If someone can’t make the July 15 due date, they should file Form 4868, “Application for Automatic Extension of Time To File US Individual Income Tax Return.”

“If you cannot deposit the $6,000 into your IRA account by July 15, you are not entitled to the tax deduction,” Kiely said. “The remedy for this is to file an amended tax return and include a check for the change in income taxes. There will be no penalty if you pay the tax by July 15.”

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Karin Price Mueller writes the Bamboozled column for NJ Advance Media and is the founder of Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for’s weekly e-newsletter.


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