Want to Slash Your 2020 Tax Bill? Do This Before It's Too Late

What if I told you there's a legal way to shield more of your hard-earned cash from the IRS, and the government might actually reward you for taking advantage of it?

Well, there is. If you have a little extra cash you won't need anytime soon, you can make a prior-year traditional IRA contribution and reap the benefits now and in retirement. Here's a closer look at how it works and what kind of a difference it can make for your taxes.

A prior-year IRA contribution is a contribution you make to your IRA for the previous year -- in this case, 2020. You can do this at any point up until the April 15 tax-filing deadline, although if you've already filed your taxes and then decide you'd like to make a prior-year contribution, you must file an amended tax return, or the government won't give you the tax break you deserve.

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Source Fool.com