16 Apr What is the deadline to invest in an IRA for 2019?
Q. What is the deadline to invest in an IRA for 2019 now that that tax filing deadline has been moved to July 15?
A. You’re correct that the tax filing deadline for both your 2019 federal return and your New Jersey return has been moved to July 15.
This also gives you more time to invest in an IRA for the 2019 tax year.
The CARES Act also gave another IRA-related benefit.
For 2020, you’re not going to have to take a Required Minimum Distribution.
Congress has done this before. RMDs were suspended for tax year 2009 during the financial crisis.
Normally, those who are 72 and older (it was 70 1/2 before the SECURE Act) must take mandatory distributions from IRAs, 401(k)s and other retirement plans by Dec. 31, otherwise they’d face a hefty penalty worth 50% of what was supposed to be withdrawn.
Those who have inherited IRAs also have to take annual distributions, but the stimulus law suspends those withdrawals, too.
If you’ve already taken your RMD for 2020, you can actually put it back or roll it into a new IRA if it’s within a 60-day period without facing taxes and penalties. It’s unclear if the IRS will extend that window for all RMDs taken in 2020.
Inherited IRAs, though, cannot take the 60-day redo based on current guidance and how it worked for inherited IRAs during the financial crisis.
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This story was originally published on April 16, 2020.
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