A quick note regarding taxes and upcoming tax payment deadlines. These details could come under the category of “Captain Obvious” but are worth mentioning all the same.
The April 15th filing deadline for 2019 taxes was extended to July 15th. There have been rumors of the deadline being extended even further to September or October. This looks ABSOLUTELY NOT to be the case.* The 2019 Tax Filing deadline remains July 15th . See here: IRS.GOV
Now that the calendar has turned from April to May there will be in effect a “Tax Time Groundhog Day” on July 15th, which is the new 2019 Federal (and most States*) filing deadline for 2019 taxes.
A number of people reading this note may already have signed and filed their 2019 tax returns^ in order to turn the page and move on to 2020 spending, budgeting and saving. However, if you are in the camp that is stretching out your 2019 filing until the July 15th date, then consider a few last-minute items:
As the year turned from 2019 to 2020, there stealthily rolled in several of the most sweeping reforms to retirement and tax legislation in a decade or so (outside of the 2017 Tax Cuts and Jobs Act, or TCJA). The recent changes apply to IRA, 401k and other retirement savings accounts. If any of these apply to you then please read on:
Turning 70½ this or next year
Own a business with or proposing a 401k plan
Working for a small company and do not have access to a 401k plan
Need an early distribution for reasons of qualified birth or adoption
After a year – really a decade – of excellent returns in the stock market, and for 2019 in the stock AND bond markets, it makes sense to ask, “WHAT IF?” As in, what if certain events take place in the markets or economy that could spoil the last several years of positive portfolio returns? Naturally then, there would be a handful of guesses or responses to the “what if” questions.
We are nearing the 2019 “Tax Year Finish Line”… but there’s still time to address a handful of potentially tax minimizing items*. One that was a major item of confusion for taxpayers in 2018 was withholding elections. Especially for taxpayers making under $250,000 (and ALL taxpayers) these elections can make a big difference between getting a REFUND** and NOT getting a refund.
The beginning of October means we are in the 4th Quarter… and the countdown begins to year-end. The following are excerpts from the Year-End Tax Planning Checklist.* Several of these items, if addressed now, could make a big difference to your 2019 tax filing AND add to your savings.
Last week’s topic was potential danger to IRAs contained in new legislation lingering in the Senate. Those affected would be most IRA beneficiaries including you or your kids or grand kids. The scenario would affect the lives of more than just the wealthy. Therefore, it makes sense to present a handful of ways to minimize the possible negative consequences. Although, if the SECURE Act legislation is passed in its current form, these strategies will be even harder to come by.
Several current solutions have been discussed in prior editions of TGIF 2 Minutes, namely using the Roth IRA, Roth 401k or 403b, or Roth IRA conversions (see the link below for quick details of various Roth strategies). Most important is to have this issue on your radar – to create a balance by using both traditional and Roth strategies TODAY side by side for diversification.Continue reading “Minimizing Danger to Your IRA”
In the heart of this already HOT summer of 2019, the heat may only be beginning for your IRA. Under the seemingly friendly title of the “SECURE Act” Congress is considering plans to over-reach in the form of future taxes on IRA accounts.
There are several positive and constructive elements of the bill recently passed by the House of Representatives and currently in review in the Senate. These include provisions to lower the threshold for small employers to offer 401k plans to their employees. However, a key part of the bill would do away with one of the most popular and widely used aspects of current IRA rules: the “Stretch IRA” for beneficiaries.
Currently, and dating back to the 1990’s, the Stretch IRA favors longevity by allowing a beneficiary to stretch inherited IRA monies over a lifetime, or until the IRA (or rolled over 401k) monies are depleted. This feature has come to be a popular and inexpensive long-term planning tool. The “Stretch” also aids in managing the tax consequences of becoming an inheritor of IRA monies. Continue reading “Potential Danger to Your IRA”