Do Not Put Off Your Retirement

2019 Tax Extensions

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COVID-19 has changed the deadline for 2019 tax filings and retirement account contributions to July 15th, 2020. The 2019 tax extensions changed the deadline as a part of the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) stimulus package for tax payors. Additionally, the closure of Social Security offices, IRS tax collection processing centers, and state governments encouraging employees to stay home to help curb the spread of the virus would complicate the 2019 tax filing season without the extension. Here’s what you need to know:

IRS 2019 Tax Filing 90 Day Extension:

  • The tax filing deadline extension should help individuals and businesses that need to pay additional taxes that haven’t yet filed to provide financial help while their income may be impacted.
  • Individuals and businesses that have already filed their 2019 taxes will receive an additional 90 days to make their tax payments to avoid interest and penalties.
  • Automatic payments that schedule through IRS Direct Pay will not automatically cancel or extend. IRS Direct Pay accounts will need to be modified by the individual using the confirmation number from the original scheduling confirmation email received.
  • If payments are scheduled with an electronic funds withdrawal, you may cancel it by contacting the U.S. Treasury Financial Agent and make a request no later than two days before the scheduled withdrawal date.
  • If you scheduled payment by debit or credit card, contact the card processor to cancel the payment.

Retirement Account Contribution Extension Relief:

  • Because the tax filing date has extended, you
    now have an additional 90 days (July 15th, 2020 deadline) to make
    other retirement account contributions for 2019.
  • If you already contributed your maximum for
    2019, you will not be allowed to contribute more towards 2019 without a
    penalty.
  • Employers that contribute towards their
    employee’s retirement savings plans as an employer contribution will have an
    additional 90 days, until July 15th, 2020, to make their
    contributions for 2019.
  • For an individual that took a retirement savings
    account distribution in 2019 before age 59 ½ and had a 10% penalty, the penalty
    doesn’t need to be paid until July 15th, 2020. This extension only
    applies if the individual will file a tax return after April 15th,
    2020, and hasn’t already filed their 2019 tax return.

Anytime an individual makes additional income, it must be reported on their income tax per IRS guidelines. However, the CARES Act stimulus payments will not be considered income when individuals file their 2020 income tax. If you have any questions regarding the CARES Act, reach out to your accountant to clarify how the act may impact you. If you’d like to make contributions to your retirement savings plan for 2019 and haven’t maxed out your limit, now is a great time to benefit through the CARES Act extension.

Questions on how this impacts you?

© 2024 Trajan® Wealth LLC. Nothing in this blog is intended as investment advice, nor is it an offer to buy or sell any security. Please consult your financial advisor for questions about your personal financial situation. All investments involve risk, including the potential for loss. Trajan Wealth clients and employees may have a position in any of the securities mentioned. Portfolio holdings and other data are subject to change at any time and without notice. Additionally, the above links provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. These materials are for informational and educational purposes and are not designed, nor intended, to apply to any person’s individual circumstances. It does not take into account the specific investment objectives, tax and financial condition, or particular needs of any specific person. Please consult with your legal and/or tax advisor before making any tax-related decisions.

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