Tax deductible IRA, HSA, SEP, or solo 401(k) contributions

Some individual taxpayers may have filed their 2019 income tax returns before they maxed out their contributions to a tax-deductible IRA, Health Savings Account (HSA) Simplified Employee Pension (SEP) or solo 401(k) (collectively, "plan"). 

The due date for making deductible contributions to a plan for 2019, normally April 15, 2020, was extended to July 15, 2020 as a result of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, 3/17/2020). (Notice 2020-23)  

This means that an early filing taxpayer, who contributed to a plan after filing their return, but before July 15, may have missed a 2019 deduction. Although those contributions could still be deducted on their 2020 tax return, given the time value of money in a cash-strapped COVID-19 environment, amending the return may make sense.

Beginning in August 2020, individuals will be able to file an amended return electronically. (IR-2020-107, May 28, 2020)

Also, individual taxpayers can use the IRS's new "Where's My Amended Return?" tool to check the status of their amended return. Note that it can take up to three weeks for the amended return to show up in the IRS's system and the amended return may take up to 16 weeks to be processed.

For additional tax tips and guidance, explore Thomson Reuters resources such as Federal Tax Handbook 2021, Federal Tax Regulations, Winter 2021, and the Complete Internal Revenue Code, Winter 2021.