Friendly Advice for your New Year
We hope you’ve had a wonderful Holiday Season so far, and we wish you the very best for a great New Year’s celebration and a healthy, happy and prosperous 2020! Since part of prosperity typically involves finances, what follows is a brief notice of various updates and changes to retirement plan contribution limits for 2020, and a short reminder of why it’s not necessarily good to file your taxes as quickly as possible.
2019 IRA Contributions
You still have time to contribute to a Roth IRA or a Regular IRA for 2019. The maximum contribution for 2019 is $6,000, unless you’re over 50, in which case you’re permitted to contribute an extra $1,000 – for a total of $7,000. You have until the earlier of April 15, 2020 or the date you file your 2019 tax return to contribute.
Don’t Jump the Gun
Speaking of taxes, we all think we should get them done early. However, waiting until closer to the April 15 deadline reduces the risk of receiving a corrected 1099 and then having to endure the expense and frustration of filing an amended return.
It’s important to remember that custodians have until the end of February to send 1099s. But, given our experience over the last few years, it may be smart to wait to file until a few weeks after that – in case they must make corrections.
Revised 1099s have become more commonplace, and there’s nothing more maddening than receiving a corrected one after you’ve made the effort to file your tax return early.
2020 IRA Contributions
If you want to get a head start on 2020 contributions for either a Regular IRA or a Roth IRA, you’re permitted to make them as soon as the year begins! The standard and catch-up limits for IRAs remain the same as they were for 2019.
2020 Changes to Corporate Contribution Limits
The IRS has announced an increase to its contribution limits for various Corporate Retirement Plans, providing cost-of-living adjustments for tax year 2020 – so reach out to your HR Department early if you’d like to take advantage of them!
Please give us a call if you have any questions, or if you’d like to set up a meeting. We’d love to hear from you. Thank you, again, for your confidence and trust.
Thomas G. Twombly
President