In response to Coronavirus (COVID-19), the Treasury and the IRS recently announced changes to the tax deadline.
The federal tax filing deadline has been extended to July 15, 2020. Taxpayers getting a refund are encouraged to file their taxes now to get their money in this time of need.
Some good news, this also means that you have until July 15 to make contributions to your IRA for 2019. We’ve summed up what this deadline extension means for you below.
Extended Deadline for 2019 IRA Contributions and Workplace-Based Retirement Plans
Typically you can make an IRA contribution for the tax year up until the April tax deadline and make an impact on your taxes. For example, IRS allows you to make a 2019 IRA contribution up until the tax deadline and possibly get a deduction on your 2019 taxes.
Because the federal tax filing deadline has been extended to July 15, 2020, the deadline for making a 2019 IRA contribution is now also extended to July 15, 2020.
Extended Deadline for Tax Owed on Gross Income from IRA/Work-Based Retirement Plan Distributions
If you owe 10% additional tax on amounts includible in gross income from an early distribution that you took from your IRA or workplace-based retirement plan in 2019, the reporting and payment of the 10% additional tax has been extended to July 15, 2020.
This is because the additional tax is calculated, reported and paid at the same time as the income tax owed on the amounts includible in gross income. If you file before July 15, the 10% additional tax will be calculated at the time you file since it is calculated with your tax filing.
Removal of Excess Elective Deferrals from Work-Based Retirement Plans
If you made excess elective deferrals to your workplace-based retirement plan, you have to take those excess deferrals and income out of the plan no later than April 15, 2020, to exclude the distributions from income as that date has not been extended.
TurboTax Has You Covered
You can be confident that TurboTax is ready to help you stay informed and file now up until the extended July 15, 2020, federal deadline. Additionally, our team of credentialed TurboTax Live CPAs and EAs is available on-demand to help you out should you have any questions along the way.
The IRS is expected to issue additional guidance on the COVID-19 tax relief, so be sure to check back here for the most up to date news and information.