There are very few things the recent COVID-19 pandemic has not affected. The need to continue paying our taxes, of course, is one of them.
Thankfully, with so many of us experiencing a loss in pay or a reduction of work, the Internal Revenue Service (IRS) has extended the tax filing (and payment) deadline from April 15 to July 15. That said, Treasury Secretary Steven Mnuchin did urge people that are expecting refunds to file now, in order to “get their money.”
It’s not yet clear whether those who anticipate estimated tax payments for 2020, which are normally due in April and June, will still be obligated to make 2020 payments. It is also unclear how 2019 tax extensions will work with the new July 15 date (i.e. whether the standard October 15 date will still hold, or if a full six-month extension will still be available, which could push extension due dates out to January 2021 for the 2019 tax year). In addition, questions remain of whether all states will follow suit and adjust their own tax deadlines to conform.
Most importantly, from an opportunity standpoint, is that the IRS also released a notice clarifying that the 2019 IRA contribution deadline has also been extended to July 15.
With the “W” recovery trajectory a likelihood, now is the time to make 2019 and 2020 Traditional and Roth IRA contributions. Getting those dollars working for you in a tax-deferred manner, today, might prove to be one of the best investment decisions you’ve ever made.
In a time of uncertainty throughout the nation, it is important to remember that all of our financial decisions are stewardship decisions. Ambassador Advisors is here to help you taking advantage of the extended contribution date, coordinate with your tax preparer and navigate new information, as it arises.
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