There's Still Time to Contribute to Your IRA and Cut Your Taxes
Although you need to act quickly, you still have time to make a 2021 IRA contribution and lower your tax bill.


As we approach the end of this year's tax filing season, make sure you haven't overlooked one of the best ways to cut your tax bill and secure your future — contributing to a traditional IRA. (There is no upfront tax break for funding a Roth IRA.)
You can make an IRA contribution for the 2021 tax year up until this year's tax return filing deadline, which is April 18 for most people. That doesn't leave much time, but if you have some extra income go ahead and deposit it into an IRA account today before time expires. (Just make sure the IRA administrator knows it's for the 2021 tax year.)
And what about those tax savings? Well, depending on your income, you may be able to deduct your IRA contribution on your 2021 tax return. To contribute to a traditional IRA, you or your spouse must have earned income from a job. But, otherwise, you may be able to deduct contributions to an IRA even if you or your spouse are covered by another retirement plan at work. Plus, starting in 2020, seniors age 70½ and older with earned income can now contribute to a traditional IRA, too.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Here's some more good news: The IRA deduction is an "above the line" deduction, meaning you don't have to itemize your deductions to claim it. It will reduce your adjusted gross income (AGI) dollar-for-dollar, lowering your tax bill. And your lower AGI could make you eligible for other tax breaks, which are tied to income limits.
Who Qualifies for the IRA Deduction
If you're single and don't participate in a retirement plan at work, you can make a tax-deductible IRA contribution for 2021 of up to $6,000 ($7,000 if you're 50 or older) regardless of your income. If you're married and your spouse is covered by a workplace-based retirement plan but you're not, you can deduct your full IRA contribution as long as your joint AGI doesn't top $198,000 for 2021. You can take a partial tax deduction if your combined income is between $198,000 and $208,000.
But even if you do participate in a retirement plan at work, you can still deduct up to the maximum $6,000 IRA contribution ($7,000 if you're 50 or older) if you're single and your 2021 income is $66,000 or less ($105,000 if married filing jointly). And you can deduct some of your IRA contribution if you're single and your income is between $66,000 and $76,000, or if you're married and your income is between $105,000 and $125,000.
Spouses with little or no earned income for 2021 can also make an IRA contribution of up to $6,000 ($7,000 if 50 or older) as long as their spouse has sufficient earned income to cover both contributions. The contribution is tax-deductible as long as your household income doesn't exceed the limits for married couples filing jointly.
Double Tax Break with the Saver's Credit
Some low- and moderate-income taxpayers get an extra tax break on their 2021 return for contributing to an IRA or other retirement account.
In addition to the usual IRA deduction, you may qualify for a Retirement Savers tax credit of up to $1,000 ($2,000 for joint filers) for contributions to an IRA or other retirement tax plan. (A tax credit, which reduces your tax bill dollar-for-dollar, is more valuable than a deduction, which merely reduces the amount of income that is taxed.)
The actual amount of the credit depends on your income. It ranges from 10% to 50% of the first $2,000 contributed to an IRA or other retirement account. To be eligible, your 2021 income can't exceed $33,000 if you're single, $49,500 if you're the head of a household with dependents, or $66,000 if you're married filing jointly. The lower your income, the higher the credit. But you can't claim the Retirement Savers credit if you're under 18, a student, or can be claimed as a dependent on someone else's tax return.
File an Amended Return
What if you already filed your 2021 tax return? No problem – just file an amended tax return after April 18 to claim your new or increased tax breaks. You generally have three years from the date you filed your original return or two years from the date you paid any tax due to file an amended return (go with whichever date is later).
Use Form 1040-X to file an amended return. You can mail in a paper return or file electronically. We recommend e-filing your amended return, since it will be processed much faster. If you're changing your IRA deduction, make sure you write "IRA deduction" and the amount of the increase or decrease in Part III of the form. Once you file an amended return, you can track its status online using the IRS's "Where's My Amended Return?" tool or by calling 866-464-2050.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.
-
Vacationing With the Grandkids: What Could Go Wrong?
Traveling with your grandkids may be on your bucket list, but before you book the trip, consider the downsides of gramping.
-
Our Annual Grandparents’ Guide to Today’s Pop Artists
If you grew up loving Dylan, Coltrane or other great artists, here are some modern musicians that tap into similar styles and spirits. Check out our playlist.
-
Big GOP Tax Bill Could Change Your Estate Planning for 2025
Tax Law The GOP might extend and increase the higher estate and gift tax exemption and AMT thresholds. What might this mean for your estate plan?
-
New 'No Tax on Tips' Bill Approved: What to Know Now
Income Taxes Will you stop paying taxes on your tip income this year?
-
Millions Could Lose SNAP Food Benefits Under Trump Tax Cut Plan
Tax Policy The House Agriculture Committee approved nearly $300 billion in cuts to SNAP benefits, putting many at risk of hunger.
-
Missouri Leads Capital Gains Tax Repeal: Will Your State Follow?
State Tax As one state becomes a test case, policymakers and taxpayers across the U.S. will be watching closely to see what happens next.
-
Here's How the Child Tax Credit Could Increase Under Trump
Tax Credits House Republicans released details on President Trump’s ‘one big, beautiful bill,’ including an increased child tax credit.
-
New Overtime Tax Deduction Proposed for Millions Working Extra Hours
Tax Law Some lawmakers and President Trump want to offer overtime tax relief. But will a tax deduction or an exemption help you most?
-
Big Tax Deduction Increase Proposed for Those Over Age 65
Tax Deductions A new bipartisan bill and a tax plan from the House GOP could mean bigger retirement tax savings to offset taxes on Social Security and high prices.
-
Ten Cheapest Places To Live in New York
Property Tax If you’re planning a move in New York, here are the counties with the lowest property tax bills in the Empire State.