Tax Day Finally Arrives


The revised tax day date, July 15th, is upon us, and there are several important things to note, whether you’ve filed already or not. While our tax bill might only be at the forefront of our minds during one time of the year, the reality is that financial moves throughout the year can impact your tax bill in the short-term and for years to come. There could be opportunities to take advantage of that would help minimize your tax burden now and in the long-term. Here’s what to know now that tax day is finally arriving.

Suspended RMDs and a New Rollover Option

The CARES Act waived RMDs for 2020, and now there is relief for those who took an RMD before the CARES Act was passed. If you took an RMD for 2020 from a 401(k), 403(b), or IRA, you can now roll the funds back into a retirement account. The normal 60-day rollover period for RMDs has been extended to August 31st, 2020.[1]  This also applies to anyone who turned age 70 ½ in 2019 and would have had to take their first RMD by April 1st, 2020. The new rule also applies to inherited retirement accounts, and beneficiaries have until August 31st, 2020 to put the money back and not pay tax on the amount. If you’re not taking RMDs yet, consider how they could affect your tax burden in the future.

Applying for a Tax Extension

Those who cannot file their taxes by July 15th can apply for an extension. The extension provides six additional months from the original deadline of April 15th, not the extended July 15th date. And, the tax payment deadline cannot be extended. This means that the tax payment deadline is still July 15th, but the filing deadline extension is October 15th. Those who pay taxes quarterly must pay taxes for the first two quarters of 2020 by July 15th.[2]

Opportunities for Tax Minimization

The CARES Act offers opportunities for tax minimization in 2020 and beyond. Retirees who would normally need to take Required Minimum Distributions from their retirement accounts now have the option to forego taking distributions for 2020. If you don’t need the income from an RMD, you can take advantage of this opportunity. By keeping your income for 2020 low, you can potentially reduce your tax burden or possibly make a Roth IRA conversion. If you are planning on withdrawing from your retirement accounts, keep in mind that you can take coronavirus-related distribution up to $100,000 from a retirement account(s) without incurring an early withdrawal penalty of 10%.[3]

Taxes can be one of our biggest expenses, even when you’ve stopped earning a paycheck. Don’t forget about tax minimization strategies after you’ve filed – what you do now could affect your tax burden later on in retirement. A financial advisor can help you create a long-term tax minimization strategy as part of a comprehensive retirement plan. Contact us to find out how we can create a plan to fit your needs.




The commentary on this blog reflects the personal opinions, viewpoints and analyses of BML Wealth Management’s employees providing such comments, and should not be regarded as a description of advisory services provided by Cooper Financial Group. The views reflected in the commentary are subject to change at any time without notice. Nothing on this blog constitutes investment advice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future returns.

Investment Advisory services are offered through Cooper Financial Group, an SEC Registered Investment Advisory firm. All Insurance Services are offered through BML Wealth & Insurance Services. California Insurance License #0M15550. BML Wealth Management & Cooper Financial Group are not affiliated.

We do not provide tax or legal advice, all individuals are encouraged to seek guidance from qualified professionals regarding their personal situation. Any references to protection benefits or steady and reliable income streams in this guide refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by insurance company. Annuities are not FDIC insured. Indices mentioned are unmanaged and cannot be invested into directly.

Posted in

Ready to take
The Next Step?

Schedule Your Retirement Fingerprint® Review

A Complimentary 15 Minute Call