As we approach the revised deadline of July 15th for filing 2019 taxes, here are a few things to keep in mind.
JUNE 2020 Newsletter
As we approach the revised deadline of July 15th for filing 2019 taxes, here are a few things to keep in mind:
- If you need extra time, you can file for an extension to October 15th. But remember, the additional time only extends the tax return due date. You still need to figure the tax you owe and pay that by July 15th to avoid penalties.
- IRA and HSA contributions can be made up to July 15th. After age 65, HSA accounts can be used for any reason without incurring a penalty; if they are used for qualified medical expenses, no taxes are due on the withdrawal.
- Quarterly estimated tax payments normally due on April 15th and June 15th are now due by July 15th.
- If you received a stimulus check from the government, you’ll report this on your 2020 return, but won’t be taxed on it. Technically, the check is an advance payment of a special 2020 tax credit. On your 2020 return, you’ll reconcile the payment received against the tax credit allowed. …. Sound like smoke and mirrors?
- A proposal is under discussion to suspend the employee portion of the payroll tax (7.65%) for the remainder of the year. It’s been under discussion for several months and we see it as an efficient way for the government to return citizens’ money.
- Even though required minimum distributions are not mandated for 2020, you can still give money charitably via a QCD (“qualified charitable distribution”) from your IRA and not be taxed on that distribution.
On the investing front, here are some disturbing facts. LPL Research published a chart based on data from Fidelity Investments as of June 17th, 2020. The data showed that approximately 30% of investors over age 60 sold all of their equity holdings between February and May of this year. At the same time, investors moved to cash at a record pace. The past three months saw the largest three-month change ever; nearly $5 trillion is now in money market funds, almost twice the level of five years ago. This is backwards. People should have added money, not sold it. History is constant with this advice.
Karl Kuelthau, Author, Principal
Louise Googins, Principal
Michael Googins, Administrator
Kim Rankin, Accountant
Carson Bieber, Associate