In addition to changing the filing and payment deadlines for your 1040, the new extensions also impact IRA contributions and estimated payments.
Normally for IRA contributions, you can claim credit for contributions made before the April 15th filing due date. For example, if you paid $500 into an IRA on March 21st of 2020, you could still claim it as a contribution on your 2019 return. The COVID19 extension that postpones filing and payment to July 15th also moves the deadline for IRA contributions to July 15th of 2020.
Any 2020 estimated payment due on April 15th can also be postponed up to 90 days. On the other hand, it is important to note that this relief does not change the deposit requirements or estimated tax penalty for 2019. If you were late on estimated payments towards your 2019 return, this happened before the pandemic occurred and you would not receive any penalty relief.
For more information on Contributions to Individual Retirement Arrangements, see IRS Publication 590-A. For more information on Estimated Tax Payments, visit https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes.
Clergy Financial Resources is monitoring IRS news in regards to the pandemic and will continue to provide additional updates as they become available.
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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