One Minute Takes

Financial planning is part of our soul. We all have all the latest trend resources bookmarked on our devices. If we're not planning, we're learning. If we aren't learning, we're planning. We're always one step ahead so we can bring the best of our talents to our clients. We find enjoyment in teaching those who want to learn. If you have questions, we have answers. Our One Minute Takes are quick reads on financial trends, basics, and more.

Tax Day Extended to July 15, 2020

Due to the timing and extent of COVID-19 across the country during March and April, the IRS has extended the federal income tax filing deadline from April 15 to July 15, 2020.  Therefore, if you or your CPA need more time, you can get a tax extension by filing IRS Form 4868. By submitting this form, you are able to extend the federal income tax filing until October 15, 2020.  However, please remember that filing for an extension does not allow more time to pay.  This only gives you more time to file your return.  Therefore, even if you need to extend your tax filing, you still need to estimate your tax bill and remit payment by July 15, 2020.  Additionally, anything you owe after the deadline is subject to interest and a late-payment penalty if you do not pay at least 90% of your actual tax liability by July 15, 2020.

The Secure Act and Beneficiary IRAs

In December 2019, new retirement legislation was put forth and approved that would require beneficiaries of inherited IRAs to withdraw the money within 10 years.  Under previous legislation, the beneficiary of an inherited IRA could choose to only take the required minimum distribution over their own life expectancy, possibly over 20-40 years depending on the recipient’s age i.e. “stretch IRA”, rather than taking all of the money within the first five years in the case where a trust was the named beneficiary.  However, this tax-advantaged “stretch IRA” possibility was removed with the Secure act, and therefore will allow beneficiaries only ten years to remove all the money from the inherited IRAs, regardless of tax consequences as payments received from the inherited IRA will be taxed at the beneficiary’s ordinary income tax rate.