The Oxford Club’s Chief Income Strategist, Marc Lichtenfeld discusses the 2020 tax extension deadline. What it means for you, when you should file and more.
2020 Tax Extension Deadline is July 15th
The IRS has extended the deadline for when you need to file your taxes to July 15th (instead of April 15th) due to the coronavirus.
So What Does That Mean For Me?
Well I think there are two main things. First of all, your IRA contributions or your tax deferred contributions. Most people typically will contribute to their tax deferred accounts by April 15th, because you can take that deduction on the previous year’s taxes. So, for example in a normal year you might have contributed $1,000 to your IRA on April 1st. You can take that off your 2019 taxes, if you did it on April 1st 2020. This is because the IRS deadline for filing your tax has been moved to July 15th.
When Should I Make Contributions?
Here’s what I suggest…If you are planning on extending when you’re going to file your taxes to July 15th, I would still make any contributions to your tax deferred accounts by April 15th. Just to be sure. And that’s if you want to take it off your 2019 taxes. If you don’t care whether it’s 2019 or 2020, you can make the contribution anytime you want. Even after July 15th and you’ll still get it off your 2020 taxes. But, if you want that 2019 deduction, I would make sure you make that contribution to your IRA before April 15th.
2020 Tax Extension Deadline: Should I Wait Until July to File?
Like I said, you have until July 15th this year to file your taxes.
So should you do that? I would suggest no unless you absolutely need to. Now for some people, because of the virus and the effect on their business, it might be necessary. You could have very complicated taxes. So if it’s necessary, sure take the time. But if you don’t need that extra time, I would get it out of the way.
Because first of all, taxes are such a pain in the neck. So just get it done with anyway. But 73% of Americans receive refunds every year. So, if you’re one of those three out of four Americans who receive a refund, you might as well get the money now. Go get that money! Don’t give it to Uncle Sam to keep for three more months. It’s your money…get it. So filing your taxes on time is what I would suggest. No need to extend it unless it’s absolutely necessary.
Sticking It To The Tax Man
Be sure to check out my other tax saving tips in this series Sticking It To The Taxman. We also have another video series for you. It’s called State Of The Market, where I talk about how to handle this crazy volatile market. It’s something you don’t want to miss. Especially as the markets are swinging by thousands of points seemingly every single day.
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