“As I speak with residents and friends out in our communities, we’re getting a lot of questions about recent tax law changes,” says Katharine Miller, Executive Director of the Covia Foundation. “We thought it would be good to share an overview on some of these changes – especially now since many of us have time to catch up on all of that planning and some of those details.”

To provide some information, the Foundation invited Bill McMorran of Green Oak Consulting to provide some basics on the recent Coronavirus Aid, Relief and Economic Security (CARES) Act – “880 pages of fun” – while emphasizing that “as always, you need to talk to your own advisors because they do know your situation better than anyone else.”

Although the new tax deadline is July 15^th, “It’s really important if you have a refund coming to file as soon as possible.” Although McMorran filed his taxes and those of his mother on the same day, McMorran received the direct deposit into his account after five working days, while his mother received her paper check about a week later. “We’re seeing that the direct deposit accounts are the ones that receive priority – or at least they’re moving them out faster,” he says.

On the other hand, if you expect to owe taxes, “you have 90 more days to file your federal returns, and California gives you until July 15 as well to file your tax return. So if you owe money, figure it out, and then sit on it until about July 10, then send it in.” The July 15 deadline also extends to contributions to retirement funds.

Estimated tax payment deadlines have also been extended. Your April 15 first quarterly estimated taxes for the United States and for California are now due July 15. In a recent change, the June 15 second quarterly payment to the US and to California are also now due on July 15.

McMorran noted that “probably one of the best pieces of news I think anyone could expect or have asked for is that, if you take a required minimum distribution out of your IRA, you do not have to take it this year.” Those who choose not to take the distribution will have a lower income and, accordingly, lower taxes.

“If you’ve already taken your required minimum distribution in the past 60 days, you can put it back in,” explains McMorran. He refers people and their financial advisors to section 2203 of the CARES Act to determine what’s best for them. 

Finally, McMorran encourages people to take advantage of this time to review their overall estate plan. “Have you looked at your estate plans in the past three to five years?” he asks. He suggests making sure that your beneficiaries, trustees, and legally responsible parties are all current and able to fulfill the duties assigned to them. “Also, while we have a lot of time on our hands, think about your own legacy: how to best benefit people, the organizations you care about, what really matters, and what you want to share with the future.”

If you would like to see McMorran’s full presentation, as well as another video that goes into more depth about other planning topics, please contact Katharine Miller at the Covia Foundation at kmiller@covia.org and she will send you the online video links.  Covia Foundation will be offering more useful information by video in the future.

The Foundation is available to provide support and insight into your financial planning, charitable giving, charitable remainder trusts, charitable gift annuities, and legacy planning. You can read the Foundation’s most recent Community Matters newsletter to learn about Covia’s impact in the greater community and how gifts and donations to the Foundation help provide critical services to older adults.

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