We’re getting closer and closer to that July 15, 2020, date, but there are still things that can you can do to reduce your 2019 taxes. And when the IRS and the states actually extended the tax due date, they also extended just a number of other provisions.

So, people can still contribute to their IRAs, correct?

Right. So normally April 15 is the last day that you can contribute to an IRA for the previous year. Well this year, because of the July 15 deadline, that was also extended to July 15.

So, the 2019 limit was actually $6,000 per person, or $7,000 if you’re over the age of 50 (actually, 50 or over). Now, that amount is subject to income limits, like we’ve talked about on prior shows. But if you and your spouse (if you’re married) don’t have access to another company retirement plan, then there’s probably a really good chance that you can put away the full $6,000 or $7,000 each.

You want to be careful, though, because if you or your spouse has access to a company retirement plan, then it depends on how much income you have as to how much money you can put into your IRA. Now, you’ll know this by just looking at your W-2, because there’s a “retirement plan” box, and that’ll be checked if you actually have a company retirement plan, even if you’re not sure if you have one.

You know, you can also contribute to a Roth IRA, assuming that you fit within those income limits.

But just remember: July 15 is that hard deadline. Even if you extend your return, July 15 is the date.

What about other retirement plans?

You know, individuals with the IRAs is a good plan, but also there’s other retirement plans for small businesses, and that’s like an SEP—a Simplified Employee Pension, they call it—where an employer can put between 20 and 25 percent of their business income away.

Now, this can be done later than the IRAs. Where the IRAs have to be done by July 15, [with] this one a (small) business owner can have until Oct. 15, 2020, to be able to do that—as long as they extend their return.

So once again, with this business owner SEP, they have until Oct. 15 to actually put more money away into their 2019 retirement plan, as long as they’ve extended their return.

Now what about an HSA, or a Health Savings Account contribution?

That’s another one. So, in that case, the 2019 limit was $3,500 for a self-only plan, or $7,000 for a family plan. I really like HSAs—a lot of flexibility. And even in addition to those $3,500 and $7,000 numbers that I just mentioned, somebody that’s 55 or over can actually put an additional $1,000; they call it the “catch up.”

Now, in order to do that, you need an HSA or Health Savings Account-eligible health insurance plan in order to contribute, and there is a little bit of misconceptions about that, because it’s not all high-deductible plans that qualify. So you’re going to want to check with your insurance provider or your employer just to make sure that you have an HSA-eligible plan. And you can’t do it if you’re on Medicare.

Once again, July 15 is the hard deadline to put any money into an HSA and be able to deduct it on your 2019 return. But the nice thing is, like I said, I really like them, because unlike a Flexible Spending Account, this is not a “use it or lose it” plan. You can put money into it this year and you can take out that money this year, next year, even the year after—doesn’t really matter on timing as much.

Anything else to discuss on today’s topic …?

I guess there’s just one last thing, and that’s just a reminder. So for those making quarterly tax estimates, which were normally due here on April 15 and June 15, both those first and second quarter estimates are due here on July 15, so just remember: Don’t forget to make your first two quarterly tax payments by July 15.

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Jeff Dvorachek
I joined Hawkins Ash CPAs in 1998. I am the partner-in-charge of the Manitowoc, WI, office and tax director for the firm. I have thorough experience providing tax services to individuals, commercial businesses, nonprofit entities and estates and trusts. I also provide compilation and review services. I lead the Tax Committee and am a member of the Information Technology Advisory Committee.

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