It’s the end of March, and normally we’d be gearing up for the end of tax season. However, among the many changes that coronavirus has brought, one is the variety of tax extensions and payment deadlines for 2019 and 2020.
Below are the key points we see as most relevant for our clients. If you have questions about how these affect you specifically or other related questions, please be in touch. We welcome a conversation.
Tax Filing & Payment Deadlines
The federal and California tax filing and payment deadlines have been extended to July 15, 2020. The primary impact this has is that final tax payments for 2019, and 1st and 2nd quarter estimates for 2020, can be delayed by 3 months without penalty. Curiously, the federal 2nd quarter tax estimates are still due June 15, 2020, although we wouldn’t be surprised if this is changed soon.
If you expect to receive a refund, we recommend filing when you are able to, as refund payments are not impacted by the delayed deadline and will be sent immediately. If you owe a tax payment, in most cases we recommend waiting until the deadline to pay, even if you file your taxes sooner.
IRA Contributions
The deadline for making IRA contributions is also extended to July 15, 2020.
Change to Required Minimum Distributions (RMDs)
Required distributions from all retirement plans (including contributory and beneficiary IRAs) have been waived for 2020.
Tax Planning Opportunities
For most of our clients who have been taking RMDs, some degree of adjustment is likely warranted, and we are currently evaluating this. In combination with the waiver of RMDs, the potential for harvesting taxable losses in 2020 may create other tax planning opportunities. This provides a good opportunity to explore your particular situation as appropriate in the coming weeks and months. If you have any questions please do feel free to reach out.
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 | About Sam Wood-Bednarz, CFP®Sam Wood-Bednarz is a Partner, Senior Advisor, and Director of Advisory Services. He provides clients with a sense of confidence and security in their financial lives. |
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