Tax Filing and IRA Contribution Deadline, 90-Day Extension
In response to the COVID-19 pandemic, the Federal Income Tax deadline and the Massachusetts State Individual Income Tax deadline have been extended an additional 90 days to allow certain taxpayers and businesses to file and pay their 2019 tax liability. The IRS is still accepting returns and processing refunds now. Furthermore, the deadline for 2020 IRA Contributions has been extended.
The new deadlines are as follows:
Federal Income Tax Filing & Payment Deadline – extended to July 15, 2020
Mass State Income Tax Filing & Payment Deadline – extended to July 15, 2020
If you owe federal or state income taxes for 2019, you can delay your payment until July 15, 2020. You will not owe interest or penalties if you pay before this deadline. If you need more time, you can request an extension to October 15, 2020.
IRA Contribution Deadline – extended to July 15, 2020
Federal Income Taxes:
The Treasury Department and Internal Revenue Service have announced that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.
According to the IRS,
“Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.
Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004.”
Massachusetts State Income Taxes:
According to the Office of Governor Charlie Baker and Lt. Governor Karyn Polito,
“[Massachusetts] announced an agreement to extend the 2019 state individual income tax filing and payment deadline from April 15 to July 15 due to the ongoing COVID-19 outbreak. This income tax relief is automatic and taxpayers do not need to file any additional forms to qualify.”
Individuals with questions or concerns regarding taxes can contact the Massachusetts Department of Revenue at (617) 887-6367 or send a secure e-message through MassTaxConnect.
The 2020 Tax Filing deadline has been moved from April 15th, 2020 to July 15th, 2020. This means that any 2019 IRA Contributions will be accepted until July 15th, 2020.
Additionally, Congress has provided relief by instituting a temporary waiver of Required Minimum Distributions (RMD) for 2020. This means that any one required to take an RMD for the year 2020 (excluding Beneficiary IRA’s) can choose to waive taking their required distribution. Even though RMDs are waived, you can still withdraw any amount you need, depending on your situation.
Penalty-free early IRA or 401(k) withdrawals up to $100,000 are available to those who are impacted by the coronavirus crisis. This requires filling proper paperwork along with your taxes in order to be considered qualified and is not a decision made by your financial institution. The distribution would be subject to normal taxation rules regarding distributions.
To qualify for the penalty tax exception the withdrawal must be a coronavirus related distribution. The listed exception are broad considering most will be affected by coronavirus in some way. The account owner or their spouse needs to be diagnosed with COVID-19, or needs to experience financial hardships as a result of the pandemic by being quarantined, experiencing job loss, having reduced housing, childcare issues, or other reasons.
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