TAX LEARNING CENTER

Your Guide To Tax Season and Tax Law Updates.

TAX ALERT | Tax Filing and Payment Deadlines Extended

In response to the COVID-19 pandemic, the U.S. Department of the Treasury and the IRS issued Notice 2020-18 on March 20, 2020. The Notice automatically postpones the April 15 deadline to July 15 for filing Federal income tax returns and making tax payments.

Key provisions are listed below:

  • There is no dollar limitation on the amount of the payment that may be postponed.
  • The filing and payment postponement can be taken advantage of without incurring late filing or late payment penalties or interest.
  • No additional tax forms are required to be filed, including extension Forms 4868 or 7004.  The relief will be applied automatically by the IRS.
  • The automatic postponement applies to all affected taxpayers, including individuals, trusts and estates, corporations and any other non-corporate taxpayers with Federal tax returns or payments due on April 15. Estate and gift tax return filing and payment deadlines remain unchanged.

Notice 2020-18 extended the 1st quarter estimated tax payment due date to July 15 but kept the original due date of June 15 for 2nd quarter estimates.  However, the IRS has since issued Notice 2020-23 extending relief to 2nd quarter estimates as well, which are now due July 15.

Because the deadline for making IRA contributions is tied to the Federal tax filing deadline, the due date for making 2019 contributions to IRAs is also extended until July 15.  Similarly, you may also make contributions to Health Savings Accounts (HSAs) and Archer Medical Savings Accounts (MSAs) until July 15.

Additionally, the deadline for filing state tax returns should be confirmed for each state. The states of Missouri, Kansas and Illinois have all adopted extension provisions and will provide automatic postponements until July 15 for filing and making tax payments. Please consult your tax advisor for specific filing requirements for the states in which you file tax returns and make payments.

Please visit the IRS Coronavirus Tax Relief website at IRS.gov/coronavirus for more information.

IMPORTANT TAX FILING DATES | Keeping You Prepared and On Time

Tax Filing Deadline | Wednesday, July 15, 2020

2020 RETIREMENT PLAN LIMITS | As Set by the Internal Revenue Service

For the 2020 tax year, the following are limits set by the IRS for contributions to your retirement plan(s).

The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $19,000 to $19,500.

The limit on annual contributions to an IRA remains unchanged for the tax year 2020 at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains at $1,000.

Under the SECURE Act passed in December 2019, significant changes were made to IRA and retirement plan rules.  A few of the most impactful changes include:

  • Repeal of the maximum age for making traditional IRA contributions at age 70 ½
  • Increase in the Required Minimum Distribution (RMD) beginning age from age 70 ½ to age 72 for retirement plans and IRAs
  • Partial elimination of the popular “stretch IRA” strategy.

(Source: IRS.gov )

2020 Tax Season Checklist

To prepare for the tax filing season, there are several things you should take into consideration.
Review our 2020 tax filing season checklist to plan accordingly.

WHEN SHOULD I EXPECT MY TAX FORMS? | What You Need to Know

Because Central Trust Company typically awaits receipt of your final tax information, we want you to be aware of when you will receive your yearly tax documents.

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