As a result of the February 2021 winter storm in Texas, the IRS has extended until June 15 business and individual tax returns filings and payments to be made by Texas taxpayers. This includes business tax returns for 2020 normally due on March 15 as well as business and individual tax returns due on April 15. This is only applicable to those affected by the February winter storm. The IRS identifies taxpayers in the covered disaster area (such as Texas) although others can all the IRS to request tax relief.
The deadline of June 15 also applies to the first quarter estimated tax payment that otherwise would have been due on April 15 in addition to the quarterly payroll and excise tax returns normally due on April 30.
Texas taxpayers also have until June 15 to make IRA contributions (instead of April 15) if they are in an affected area to get a tax deduction for year 2020. Many taxpayers can contribute up to $6,000 ($7,000 for people 50 and older with no age limit on contributions although contributions must be on earned income) to a traditional IRA or a Roth IRA for 2020, but a Roth IRA contribution will not reduce income taxes for year 2020. Although Roth IRAs are not tax deductible (you pay the tax up front), the future withdrawals are tax free.
Taxpayers who have Health Savings accounts (HSAs) will now have until June 15 to make a tax deductible contribution for year 2020. The contribution limit for a single person for year 2020 is $3,500 plus an additional $1,000 if 55 or older. For a family, the limit is $7,100 plus $1,000 if the taxpayer is 55 or older. HSAs grow tax free and withdrawals are also tax free if used for medical expenses. Contributions cannot be made to HSAs when reaching age 65.
Taxpayers should confirm with their accountant if their returns and tax payments can be delayed. They can also call the IRS to confirm they live in an affected area although the extension applies to individuals, households and businesses living or doing business in any county in Texas.
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The post IRS PERMITS TEXANS’ EXTENSION TO JUNE 15 OF TAX FILING AND PAYMENTS DUE TO WINTER STORM – EXTRA TIME TO SAVE ON 2020 TAXES appeared first on Dallas Elder Lawyer.