Tax Day Has Been Delayed – How Does this Impact You?
It was recently announced by the IRS and Treasury Department that Tax Day will be delayed from April 15th, 2020 until July 15th, 2020. This was done in an attempt to help the American people navigate through the health and financial uncertainty surrounding this COVID-19 pandemic.
A high level summary of who is affected by this announcement:
- Anyone who needed file their 2019 Federal Tax Return by April 15th now have until July 15th
- Anyone who needed to make their Q1 2020 Federal Estimated Tax Payment by April 15th now have until July 15th
- Anyone who needed to make their 2019 IRA contributions still now have until July 15th
- Anyone who needed to make their 2019 HSA or Archer MSA contributions now have until July 15th
If you’re expecting a refund for your 2019 Federal Tax Return, then our guidance is still to file by or before the original April 15th deadline to get your refund as soon as possible. The IRS has stated that the fastest way to get your refund is to electronically file your Tax Return and to link up your bank account for direct deposit. Your refund could provide a means for bolstering your emergency fund if your savings is low or if you have any potential concerns about job security or income-earning potential this year.
Alternatively, if you have sufficient savings set aside in your emergency fund and want to take advantage of investing during this market dip, then you might want to take this opportunity to make both your 2019 and 2020 IRA contributions at the same time. Depending on your age, that could be an additional $12,000-$14,000 that you’re able to invest & stash away for retirement.
The 2019 and 2020 annual IRA contribution limits:
- For those under the age of 50 years old: $6,000
- For those over the age of 50 years old: $7,000
One important thing to keep in mind is that your State Income Tax filing date and other state deadlines may not have been similarly delayed, like they were at the Federal level. So it’s best to consult your State Tax Agency to see if any notifications or announcements were made regarding their tax deadlines.
- Pennsylvania, for example, has extended the Personal Income Tax Return filing deadline to July 15th, 2020. Additionally, Pennsylvania has delayed Q1 2020 and Q2 2020 Estimated Tax payments until July 15th as well.
Many other states still have not announced any changes to their tax deadlines, although more updates could be happening over the next few weeks as state officials continue to evaluate the impact of the COVID-2019 pandemic.