We are here to support you and your 2020 tax changes. Here is an overview of tax-related laws and information to help with tax planning for 2020.
Early distribution penalty waived
The 10% early distribution penalty on up to $100,000 of retirement withdrawals for coronavirus-related reasons is waived during 2020. New tax rules allow tax liabilities on these distributions to be paid over a three-year period. If you need the funds, you won't see your tax bill soar in one year. You can return these distributions back into your retirement account over a three-year period and not be subject to the annual contribution limits.
Option: This could be a great way to manage emergency payments until you receive a stimulus check, unemployment payments, small business loan or using a line of credit.
Required minimum distributions (RMDs) waived for 2020
The required minimum distributions (RMDs) in 2020 for various retirement plans has been suspended. The corresponding 50% penalty associated with not taking an RMD is also suspended in 2020.
Option: Taking out distributions when the market takes a tumble can hurt future retirement income. This change allows you to wait to let the value in your retirement account rebound before withdrawing funds.
IRS installment agreement suspension
The IRS is suspending payments of all amounts due from April 1 through July 15, 2020. If you do not pay your IRS installment payment during this time your installment agreement will not be in default however, interest will continue to accrue on these installment agreements.
Enforcement activities suspended and No new audits
The filing and enforcement of liens and levies will generally be suspended. The IRS will not initiate new audits during this time but will act to protect the statute of limitations.
Offers-in-compromise
The IRS will allow you until July 15, 2020 to provide additional requested information for any pending offers-in-compromise (OIC) and will not close out the OIC during this time without your consent. The IRS is also suspending any payments due under an OIC until July 15, 2020.