July 15 tax deadline offers last-minute options

Finance

ROCHESTER, N.Y. (WROC) — The pandemic-inspired July 15 income tax return deadline is looming for some this summer.

The deadline was moved from April 15 at the outset of the COVID-19 outbreak. You must file your federal and state income tax returns by July 15 or file for an extension. If you owe the IRS money, you must pay by July 15 or establish a payment plan with the government agency.

CPA Jamie Block discussed the deadline and its implication on IRA accounts and Health Savings Accounts Tuesday during News 8 at Sunrise.

Block said as a result of the CARES Act you now have until July 15 to contribute to your IRA. If you are filing a married filing joint tax return for 2019 and your modified adjusted gross income is less than $193,000, you can contribute the maximum to a Roth IRA – so long as you have earnings. There are no income limits on contributing to a traditional IRA. However, you may not receive a tax deduction if your income is too high.

In terms of IRA contributions, Block said individuals can contribute $6,000. If they are 50 or older, they can contribute an extra $1,000 (catch-up) for a total of $7,000. “Be sure to contact your advisor or account custodian to make sure you send your money appropriately so it will be categorized as a 2019 contribution.”

For Health Savings Accounts or HSAs, the CARES Act also extended the deadline from April 15 to July 15 to make 2019 contributions. Again, check with your provider on how best to get the money into your account. The maximum for 2019 for a single plan is $3,500 and $7,000 for a family plan. The catch-up age for HSAs is 55 to contribute an additional $1,000.

The July 15 deadline to file an extension does not extend the contribution deadline for IRAs or HSAs. However, certain retirement plan contributions can be extended to the October 15 deadline.

For more information, visit nysscpa.org/get-money-smart.

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