Over the last several days, the IRS has rolled out new deadlines and information for taxpayers in response to the COVID-19 pandemic. Please see the updates regarding 2019 federal income tax return deadlines below.
Federal Tax Filing and Payment
Federal income tax return filing and payment deadlines for the 2019 tax year have been extended 90 days to July 15. During these 90 days, no interest or penalties will be charged on the amount owed. For Minnesota residents, the same extension and new due date of July 15 applies.
The deadline for IRA contributions for the 2019 tax year has been extended 90 days to July 15. In order to make the July 15 deadline for IRA contributions, contribution checks (made payable to TD Ameritrade with “2019 contribution” written in the memo line) need to arrive at our office no later than July 10, 2020.
2020 Estimated Tax Payments
The deadline for Q1 2020 federal estimated tax payments, normally due April 15, has been extended 90 days to July 15. As of now, the due date for Q2 2020 federal estimated tax payments remains June 15. Please note: for Minnesota residents, the Q1 2020 estimated payment remains due on April 15, and the Q2 2020 estimated payment remains due on June 15.
2020 Tax Planning
JNBA recommends addressing 2020 planning considerations while you meet with your tax professional to finalize your 2019 tax return. We recommend asking for guidance on your 2020 income tax withholding (wages), Required Minimum Distribution (RMD) tax withholding, and possible use of Qualified Charitable Distributions (QCDs) for those over the age of 70 ½. This is also a good time to look for opportunities to increase retirement saving (401(k)) contributions to maximize your savings for the new tax year. At this time, there have been no changes to 2020 RMD requirements. Should this change, your JNBA Advisory Team will work with you directly to discuss the change.
1099 Delivery Reminders
As a reminder, realized gain/loss (cost basis) and IRA distribution details are included on your 1099 tax documents coming directly from TD Ameritrade. Please provide your 1099s to your tax professional for preparing your 2019 tax return.
- All 1099s are sent via regular mail to the address of record. Clients who have established online access can also access any 1099s and either print, save, or email them to their tax professional. In order to switch between accounts, click on the filter at the top of the screen to select the appropriate account.
- Also, clients who wish to download their account information directly into TurboTax or H&R Block should use their account number as their username and the Document ID located in the upper-right-hand corner of the 1099 form as their password.
- As of March 19, TD Ameritrade has completed the third corrected 1099 cycle. We expect the final corrected 1099 cycle from TD Ameritrade in early April. We fully understand the frustration corrected 1099s often cause as neither JNBA nor TD Ameritrade can control this delay in adjusted information. As business has become more global, companies often have to modify reported dividends, interest, or capital gain information. As a result, by law, those companies are required to pass these revised figures on to the appropriate parties, in this case, TD Ameritrade.
JNBA requests your 2019 tax returns in order to provide well-rounded and accurate financial planning advice. If you did not sign a Tax Professional Authorization form, please send a copy of your 2019 tax return to your Advisory Team or upload your return to your JNBA Modestspark Portal.
QCD – Qualified Charitable Distribution
If you are over age 70 ½ and gave money from your IRA directly to charity, please share those distribution details with your tax professional. The 1099-R generated for your IRA shows total distributions and does not include details on distributions to a qualified charitable organization. This will be important information to share as distributions to charity, up to $100,000, are not taxable.
Social Security Tax
Those who worked for multiple employers in 2019 may have paid too much in Social Security tax. The maximum amount withheld by employers was $8,239.80 per taxpayer. If your Social Security withholdings exceeded that maximum, you may be able to claim the excess as a credit.
Long-Term Care Insurance
If you own long-term care insurance, you may be eligible for an income tax credit for premiums paid during the 2019 tax year. Specifics vary from state to state, and you should consult your tax professional for additional information.
Minnesota Resident 529 Plan Contributions
As a Minnesota resident, you may be eligible for a Minnesota nonrefundable income tax credit or an income tax deduction for contributions to any state’s 529 plan. The nonrefundable income tax credit is subject to phase-out. You should consult your tax professional for additional information regarding the credit or deduction.
The Affordable Care Act requires that a taxpayer and each member of his or her family has qualifying health coverage for each month of the year, qualifies for an exemption, or makes an individual shared responsibility payment when filing his or her tax returns. Similar to last year, those who had qualifying health coverage for the whole year will simply have to check a box stating that they are covered.
Important Employer-Provided Benefit Reminders
As you gather documents for your 2019 tax return, this is a good time to complete a thorough review of your employer-provided benefits. Look for opportunities to increase your 401(k) contributions to maximize your savings for the new tax year, confirm the beneficiaries listed on your employer-provided benefits are still accurate, and determine if any adjustments should be made to your tax withholding. This can be a good question to ask your tax professional as they review your information to prepare your 2019 tax return.
JNBA is not an accountant and no portion of the above should be construed as accounting advice. All accounting issues should be addressed with an accounting professional of your choosing.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors, LLC.
Please see important disclosures information at www.jnba.com/disclosure