Tax Day has been pushed back in full, with the deadlines for both filing your 2019 return and paying any taxes you owe for 2019 extended to July 15 due to the coronavirus crisis.
This means several deadlines associated with Tax Day also are bumped back to July 15, the IRS clarified recently. They include some deadlines for tax-advantaged accounts such as retirement accounts.
Some retirement deadlines extended
The following two deadlines for the 2019 tax year are now July 15:
- Deadline for contributing to an IRA: The base contribution limit for the 2019 tax year is $6,000, with savers who are 50 or older able to make an additional contribution of $1,000.
- Deadline for paying the 10% penalty on individual retirement account (IRA) or workplace retirement plan withdrawals that are subject to that penalty: To learn about this penalty, check out “Beware These 3 Tax Penalties on Retirement Accounts.”
One retirement deadline unclear
The IRS’ recent clarification does not address the deadline for withdrawing excess IRA contributions for tax year 2019, and any money earned on the excess contributions, to avoid owing a 6% annual penalty.
I recently talked to two IRS spokespersons about this, but neither could tell me for certain whether the deadline to withdraw excess IRA contributions is April 15 or July 15.
So, if you happen to have stashed too much in your IRA for 2019 (here are the contribution limits), consider playing it safe and withdrawing the excess by April 15 if at all possible.
Other deadlines extended
The following deadlines for 2019 are also now July 15:
- Deadline for contributing to health savings accounts (HSAs)
- Deadline for contributing to Archer medical savings accounts (Archer MSAs)
Should you take advantage of extended tax deadlines?
As we recently reported, there’s good reason not to wait until July to file your tax return, at least if you expect a refund: The sooner you file, the sooner you stand to receive your refund.
If you have yet to file, check out “How to Get Your Taxes Done Absolutely Free.”
Similarly, there’s good reason not to wait until July to contribute to a retirement account or most any other type of savings account: The sooner you deposit money in such an account, the more time it will have to grow.
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