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The Extension of the Income-Tax Filing Deadline Provides Opportunities for Planning

Posted May 2020

As you know by now, the Internal Revenue Service has pushed back the deadline for filing your 2019 federal income-tax return and making any required payments from April 15 to July 15 as the country copes with these unprecedented times. Coupled with current lifestyle adjustments, the extension gives us more time to pull together needed information, to reflect thoughtfully on our tax situations, and to be more intentional in our planning for the future.

If you haven’t filed your 2019 return, don’t miss this opportunity: IRA contributions made by July 15 will be deemed effective for 2019. Check with your tax advisor to determine your eligibility and contribution limits.

Planning for this year’s taxes: New for 2020 

In addition to economic stimulus, the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed in March contains other provisions that may be important to your tax planning.

  • Suspension of RMD. Americans who otherwise would have had to take required minimum distributions (RMDs) from their retirement plans get a reprieve for 2020.
  • Options for Donors. A provision in CARES allows taxpayers who do not itemize deductions to deduct up to $300 for cash gifts to qualifying charities. Those who do itemize can deduct cash gifts to qualifying charities up to 100% of adjusted gross income in 2020, up from 60%.

Check with your tax advisor to determine how these changes may affect you and about other ways you may want to plan for next year’s return.

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