Were Your IRA Contributions Deducted?

I just rectified a tax filing issue for two clients who missed out on tax deductions they were entitled to.

Both clients had made IRA contributions for the prior tax year and used tax preparers to file their returns, but neither client received a deduction. It was not the fault of the tax preparers or the clients. It was a simple  missed communication. The tax preparers simply didn’t know the IRA contributions had been made.

I suspect these two clients are not alone.

The Timing Issue

When you contribute to an IRA, the custodian (such as Schwab or Fidelity) is required to report that contribution. The problem is that reporting is typically not issued until mid-May, after the April 15 tax filing deadline. The reason they report so late is that you’re allowed to make an IRA contribution up until April 15 (for example, you can make a calendar year 2026 contribution until April 2027).

In practice, this means that your tax preparer won’t get a form to see your IRA contributions before filing your return. Unless you tell them that you made an IRA contribution, they have no way of knowing. The deduction may simply never get taken on your tax return.

That is exactly what happened to my two clients. In both cases, we had to go back and file an amended return to claim the deduction. It was an entirely avoidable hassle.

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The fix is straightforward. Whenever you make an IRA contribution, also make a point of telling your tax preparer—and include both the exact amount and the intended tax year.

If you’re not sure whether deductions were properly included this year, check your tax return.

IRA Tax Benefits Add Up

You don’t want to miss out on your IRA deductions. For 2026, the contribution limit for individuals under age 50 is $7,500, and $8,600 for those 50 and older. The tax savings on these amounts can be significant.

Here's an example. Say you are a married couple filing jointly with a combined income of $120,000, placing you in the 22% federal tax bracket. If you each contributed $7,500 to a traditional IRA—a total of $15,000—and both contributions are fully deductible, that translates to $3,300 in federal tax savings.

Keep in mind that deductibility is subject to income limits if you or your spouse are covered by a workplace retirement plan. Your tax preparer or financial advisor can help you determine whether your contribution is fully deductible, partially deductible, or non-deductible based on your situation. But in any case, your tax preparer needs to know the contribution was made.

Don’t Miss Backdoor Roth Contributions

There is a related issue I want to flag for higher-income workers who have been doing what is known as a backdoor Roth. This is a completely legal strategy used by individuals who earn too much to contribute directly to a Roth IRA. The workaround involves making a non-deductible contribution to a traditional IRA and then converting that balance to a Roth IRA.

The mechanics are pretty simple, but again, the tax paperwork is where things can go sideways. When the conversion occurs, custodians issue a Form 1099-R showing a distribution from the traditional IRA. If your tax preparer sees that 1099-R without the context of the original non-deductible contribution (documented on Form 8606) they may treat the entire conversion as a taxable event.

But since you originally contributed after-tax dollars, only the earnings (typically a small amount, assuming the conversion happens quickly) should be taxable. The contribution itself should not be taxed twice.

Again, the solution is good communication. If you have made a backdoor Roth conversion, tell your tax preparer. Bring documentation of both the contribution and the conversion. Without it, you could end up paying tax on money you already paid tax on.

Speak Up for Your Deductions

Tax preparers are skilled professionals, but they can only work with the information in front of them. And during tax season, they’re deluged with information. IRA contributions don't show up in the documents that flow automatically into a tax return. You have to point them out.

Before your next tax appointment, take a few minutes to pull together your records. How much did you contribute to your IRAs? What kind of contributions did you make—regular? Backdoor? Write down these contribution details and bring them with you. A few extra minutes of preparation could be worth thousands of dollars in tax refunds.