We have a few brief but important updates for you.
Beginning January 1, 2020, the Care Act amended rules regarding retirement additions and distributions.
The age when required minimum distributions (“RMD”) was increased from 70 ½ to 72 years.
Individuals over age 70 can continue to make contributions to Individual Retirement Accounts.
Individuals can withdraw $100,000 from their retirement accounts without penalties.
The withdrawal can be repaid or recognized as income over a three-year period.
With a deadline of August 31, 2020, 2020 RMD distributions may be rolled back into the account, thereby avoiding taxability on the distribution in 2020.
With the extension of the individual tax return original due date to July 15, 2020, IRA contributions for 2019 can be made up to July 15.
IRS Notice Regarding Balance Due Notice Mailings
Filing dates for tax returns and payments due from April 1 to June 30 were changed to July 15. With the shut-down of the IRS offices and lack of time to make computer changes, automatic notices are being generated for filings and payments received after the original due dates (April to June). The IRS has confirmed July 15 as the filing date; penalties and interest will not be accessed. You can keep the money until July 15. No response is required to the IRS regarding the penalty notice.
Fraud at State and Federal Levels
With the provisions contained within the CARES act, criminals have been very active in filing for Federal benefits using taxpayers’ information in addition to offers of testing kits and requests for donations. Find the information accumulated by the IRS at: https://content.govdelivery.com/accounts/USIRS/bulletins/28fa832
State unemployment agencies have also been flooded with fraudulent claims. Employers and/or employees are receiving notices and approvals of the claims. The thieves filed the claims with their own (often offshore) banking information. The claims could generate issues for employers (increase in unemployment rates) and employees (Form 1099 for income never received). Information regarding the claim can be sent to email@example.com.
HoganTaylor Can Help
Information overload is the current norm. We hope this brief message provides necessary information, painlessly. If you have any questions about this content, or if you would like more information, please contact the author of this article, Denise Felber, Tax Partner, at firstname.lastname@example.org.
INFORMATIONAL PURPOSE ONLY. This content is for informational purposes only. This content does not constitute professional advice and should not be relied upon by you or any third party, including to operate or promote your business, secure financing or capital in any form, obtain any regulatory or governmental approvals, or otherwise be used in connection with procuring services or other benefits from any entity. Before making any decision or taking any action, you should consult with professional advisors.