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.
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.
About Sam Wood-Bednarz, CFP®
Sam Wood-Bednarz is a Partner and Lead Advisor who serves as Director of Financial Planning. Through comprehensive financial planning and investment management, Sam provides his clients with a sense of confidence and security in their financial lives and helps them make sound decisions as life happens.
This commentary on this website reflects the personal opinions, viewpoints, and analyses of the North Berkeley Wealth Management (“North Berkeley”) employees providing such comments, and should not be regarded as a description of advisory services provided by North Berkeley or performance returns of any North Berkeley client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data, or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. North Berkeley manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.