COVID-19 Update 3/20/2020

Hello Everyone,

Today it was announced that the tax filing date has been moved to July 15th.

We are still working as normal to get your returns done. With the new tax filing date, we want to ensure everyone that if you owe we will be communicating with you to find the right solution for you. Refunds will be done the same way they have been in the past. For the safety of our staff, we have the majority of our office working remotely. Please note emailing your accountant may be the easiest form of communication as we continue to work through this pandemic.  We also aim to have someone in the office every day for any phone calls – if for any reason – you have a problem connecting with someone in the office please email patriciav@weissthompson.com. We are honored to be able to continue to be here for everyone in such a difficult time.

Please stay safe and stay healthy.

 

Thank you,

Weiss & Thompson

 

COVID-19 Update

Hello Everyone,

We wanted to reach out in such a chaotic time and let everyone know that we are still working to get your returns done.  Your safety and health are extremely important to us so we have decided to discuss all issues over the phone, and we are asking everyone to please utilize our slot to drop off documents as well as our online portal for your documents. If you do not have access to the portal, or are having trouble logging in please us know.

We would also like to use this opportunity to inform all of you about what we know. As of now,  the tax filing due date is still April 15th. However, the payments that are owed are now due July 15th. We will keep everyone updated as new information comes in.

Please give us a call or email us directly with any questions or concerns.

Thank you for your understanding.

Stay safe and stay healthy

– Weiss & Thompson

Required Retirement Plan Distributions – Upcoming April 1 deadline stands

In most cases, taxpayers who turned 70½ during 2019 must start receiving required minimum distributions (RMD) from individual retirement accounts (IRAs) and workplace retirement plans by April 1.

The April 1 deadline applies to owners of traditional IRAs, but not Roth IRAs. Normally, it also applies to retired participants in various workplace retirement plans including 401(k), 403(b) and 457 plans. The special April 1 deadline only applies to the required distribution for the first year. Additionally, for this year and all subsequent years, the RMD must be made by Dec. 31.

If the taxpayer doesn’t take any distributions, or if the distributions are not large enough, there may be a 50% tax on the amount not withdrawn.

Just a reminder, that with the new SECURE Act, the age requirement for RMDs got bumped up from 70½ to 72. So, if you reach age 70½ in 2020, you don’t have to take an RMD until you reach age 72.

The New RMD Rules

In November 2019, before the Budget Bill was passed, the IRS increased life expectancy tables to more accurately reflect American’s longevity. The adjustment was unrelated to the Budget Bill. Who knows if another change will come (it is under discussion), but there is no direct change as of now from the Budget Bill for the tables. Use Pub. 590-B for life expectancy tables.

The big law change that occurred in the Budget Bill was a change in the required minimum distribution rules from age 70 and ½ to age 72 for people turning 70 and ½ after 12/31/2019. Read on for the explanation.

As to Required Minimum Distributions (RMD), if you were 70 and ½ before 1/1/2020 (born before 7/1/1949) nothing has changed. You must take your RMD for 2019 and 2020 and 2021 just like before the bill. As an example, Ralph turned 70 ½ on December 4, 2019. He was required to take his 1st RMD by 12/31/2019 because he is under the old law. Under a special, one-time rule, he could delay that 1st payment until 4/1/2020, but he would still be required to take his 2019 payment by 4/1/20, AND still required to take his 2020 payment by 12/31/2020, and so on. He is unaffected by the new age rule.

If you were not 70 and ½ by 12/31/2019 then a new era has arrived for you. Your first RMD will not be required until the year you turn 72. And yes, you can delay the first one until April 1 of the year you turn 73, although you would be required to take both the distributions that year. If Ralph was born July 4, 1949, he was just shy of 70 and ½ on 12/31/19, so the new rules would apply to him. He will need to take his 1st RMD in the year he turns 72, or 2021. That first RMD may be delayed until 4/1/2022, but he does still have to take a 2022 distribution by 12/31/2022 as well.

Birth date Normal First Required Payment Date Special extension1st payment option Future payment date requirement Comments
Before July 1, 1949 12/31 of year turning 70, so if turning 70 in 2019, 12/31/19 April 1 of year after turning 70 and ½, so if in 2019, delay until 4/1/2020 The year following 70 and ½, so if turning 70 and ½ in 2019, by 12/31/2020 If using the special extension date, 2020 will require 2 payments: 1 for 2019 and the normal 2020 payment
After June 30, 1949 12/31 of year turning 72, so if born in 1949 by 12/31/2021 April 1 of year after turning 72, so if born in 1949 by 4/1/2022 The year following turning 72, so if born in 1949, by 12/31/2022 If using the special extension date, 2022 will require 2 payments: 1 for 2021 and the normal 2022 payment
  • Anyone turning 70 and ½ in 2020 will not be required to take an RMD in 2020 or until the year they turn 72.
  • If still working for a company with a 401-k at age 72, you may delay your RMD until the year after you stop working there (except for >5% owners of the company).