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2020 RMD and Tax Season Information

January 30, 2020

It's everyone's favorite time of year- TAX SEASON! We wanted to take some time to remind you of important deadlines and some quick tips to make this most wonderful time of the year go as smoothly as possible.  Also, there are some changes this year regarding RMDs so please read through to the end.

First, if you have paperless access you should log onto those websites now to make sure your login and password are working.  If you are receiving paperless statements and confirmations for an account you will NOT receive a paper tax form either. You will have to log into those accounts to access your tax forms.

The deadlines for mailings/postings start January 31st and last until March 15th. 

  • January 31st: 1099-Rs  **Distributions from qualified retirement accounts
  • February 28th: All other 1099s from non-qualified accounts **You may get initial documents earlier but sometimes those documents end up needing revisions.
  • March 15th: K-1s
  • Please make sure you are providing your CPA with the final version of your tax documents. 

       Tax Day is Wednesday, April 15th.

RMDs are the Required Minimum Distributions everyone has to start taking from qualified accounts. The rules for RMDs have changed effective January 1, 2020. The required beginning age for RMDs is now 72. If you are already taking RMDs or if you turned 70.5 in 2019, you still must continue your RMDs. Our goal is to have RMDs done by fall or scheduled automatically.  The RMD must be distributed by the end of the year.  

For everyone taking an RMD and gifting to a charity, you have an option that more and more clients are taking advantage of.  This option is called a Qualified Charitable Distribution (QCD) - You gift money from your IRAs directly to a charity.  You can use some or all of your RMD in this way, and if you are gifting to a charity we highly recommend discussing this option with your CPA during this tax season.  We have seen some very positive results from QCDs.   

2020 IRA Contribution Limits

  • IRA limit remains $6,000
  • If you are 50 or older, you may contribute and additional $1,000 for a total of $7,000.
  • You must have earned income to contribute to an IRA.
  • Income limits apply to both traditional and Roth IRA contributions. 

NEW 2020 Employer Retirement Plan Contribution Limits

  • We received a small increase of $500 for 2020
  • If you are under 50 you may contribute $19,500 to your workplace retirement plan.  These are your elective deferrals.  
  • If you are 50 or over you may contribute an additional $6,500 for a total of $26,000.

We hope you found this information helpful.  Hang in there. Tax season will be over before you know it!