What is the deadline for filing my 2019 income taxes?
The IRS has extended the deadline for filing 2019 income taxes to July 15, 2020. If you still need additional time to file after July 15, you can file for an extension of time to file that further extends the due date to October 15, 2020. The filing deadline for trust income tax returns and gift tax returns due April 15, 2020 have also been extended to July 15.
I owe money for 2019 taxes, when do I need to make a payment to the IRS?
The IRS has also extended the deadline for making 2019 balance due payments until July 15, 2020 interest and penalty free. If you are unable to pay by that date, you may need to request an installment plan with the IRS. There are no limits on the amounts deferred to July 15, 2020.
What about 2020 taxes, when are those due?
Both first quarter and second quarter 2020 estimated taxes are due July 15, 2020. Third and fourth quarter due dates are unaffected and still due September 15, 2020 and January 15, 2021. There are no limits on the amounts deferred for first quarter payments.i
When are IRA and HSA Contributions due?
These have also been deferred until July 15, 2020
Will I be eligible for a stimulus check or rebate?
It depends on your 2018, 2019 and 2020 income levels. The rebate amount is $1,200 per eligible individual ($2,400 for a married couple) and $500 for each qualifying child (Under age 17 and claimed as a dependent). Nonresident aliens or those able to be claimed as dependents by someone else (whether actually claimed or not) are not eligible. You will receive a rebate if your AGI is under $75,000 for a single filer, $150,000 for a joint filer, or $112,500 for head of household. The credit phases out by 5% o AGI over the previous figures, completely phasing out at $99,000 for single filers and $198,000 for joint filers. Head of household phaseout is at $136,500 for a filer with one qualifying child.
Should I file my 2019 return now, or wait?
This depends on your 2018, 2019 and expected 2020 income levels. The stimulus check is either a pure stimulus based on qualifying 2018 or 2019 income or an advanced credit against expected 2020 income. If you are ineligible based on 2018 or 2019 income, you may get the credit if you are eligible with 2020 income. You will not be required to repay or recapture the credit if you receive an advance payment based on 2018 or 2019 income but do not qualify for 2020.
| 2018 Eligibility | 2019 Eligibility | 2020 Eligibility | Recommended Action |
| ✓ | ✓ | ✓ | File ’19 Now |
| ✓ | ✓ | X | File ’19 Now – No Repayment Required |
| ✓ | X | ✓ | Don’t File ’19 Now |
| ✓ | X | X | Don’t File ’19 Now – No Repayment Required |
| X | ✓ | ✓ | File ’19 Now |
| X | ✓ | X | File ’19 Now – No Repayment Required |
| X | X | ✓ | Will be eligible on 2020 filing |
| X | X | X | Will not be eligible |
What are some of the other new tax laws passed that may impact me?
A few new rules related to retirement accounts have been passed as a result of the CARES Act being passed:
- You may take a distribution of up to $100,000 from an IRA and a qualified retirement plan (if your company allows it) penalty-free for COVID-19 related reasons
- No Required Minimum Distributions (RMDs) are required for 2020
- For taxpayers not itemizing deductions you may claim an “above the line deduction” up to $300 of cash charitable donations starting with the 2020 tax year
I have an inherited IRA. Do I also get to waive my 2020 RMD Requirement?
Yes – the waiver applies to all taxpayers who are required to take a 2020 RMD
I already took my 2020 RMD, can I put the money back in?
You may be eligible for the 60 day rollover period. Consult with your Wheeler Accountants advisor
What happens if I decide to withdraw money from my qualified retirement plan for COVID related reasons?
A few things will happen. You will not be subject to a penalty, even if you are under age 59 ½. You may pay the distribution back within 3 years of the date of distribution. Income is recognized on the distribution either all up front in 2020 when you take the distribution, or ratably over a three year period. The details are complex and we suggest you contact your Wheeler Accountants advisor immediately.
What are some other items I should be aware of?
Governor Newsom announced a major financial relief package with several of the states largest lenders participating. You may call your financial institution and request a forbearance on your mortgage payments for up to 90 days with no impact to your credit score. We have heard lenders are stating the full forbearance amount is due after 90 days. You can find more information about the relief package on the California website. Contact your lender for details.