Tax filing season will soon be here, and as investors, it’s important to be aware of the many annual deadlines and tax documentation release dates that could affect how and when you file your taxes.
While tax season is often thought of as stressful, annoying, and time-consuming, the reality is that this is a part of the year when the choices and plans you make can greatly affect your future financial outcomes. In general, it’s safest to file your taxes as soon as your forms are available, and to review your financial plan after you’ve filed to make sure you’re planning as tax-efficiently as possible.
Before you start preparing to file your 2020 taxes, take a look at our 2020 tax season calendar to make sure you’re aware of some important tax deadlines. If you don’t find what you’re looking for here, you can also check out IRS.gov—the final source for all taxes-related dates, rules, and regulations.
2020 Tax Season Calendar
|Deadline||Why It’s Important|
|Dec. 31, 2020
10 PM ET
|The end of 2020 marks an important deadline for making big, strategic moves that can help shape your taxable income for the year. Charitable gifts and Roth IRA conversions are two big examples. Read up on what tax planning changes may be worth your while before December 31.
The last market day of the year is also normally the last day to request a Required Minimum Distribution from your retirement account. However, the CARES Act has waived all RMD requirements for 2020.
Please note that Qualified Charitable Distributions (QCDs) from IRAs require additional time to process and as such should be requested at least a week in advance of the December 30 deadline.
|Feb. 1, 2021||Feb. 1 is the deadline for Betterment to provide the Form 1099-R which is commonly received for distributions, conversions, and rollovers (except direct IRA to IRA transfers) from retirement accounts. We’ll also provide the Form 1099-INT, which reports interest earned in your high-yield cash account, Cash Reserve.|
|Feb. 16, 2021||Feb. 16 is the deadline for Betterment to send out the Form 1099-B/DIV, which is commonly received for investment sales and dividends received. You will not receive forms 1099-B or 1099-DIV for investments held in retirement accounts.|
|Feb. 16 is the first day that you can import your tax information into commercial tax software (e.g. TurboTax).|
|Apr. 14, 2021||You must initiate your deposit through Betterment by 10 PM ET on Apr. 14, to ensure that your contribution completes by the deadline. April 14 is also the deadline for the recharacterization of IRA contributions, unless you have filed an extension.|
|Apr. 15, 2021||Apr. 15 is the last day to file your taxes with the IRS (unless you request an extension). Handle any of your last minute moves the week before, just to be sure.|
|Jun. 1, 2020||We will provide Form 5498 if you made IRA contributions, conversions, and rollovers into retirement accounts at Betterment. While this form is important to support IRA basis and rollovers if ever audited, it is not needed to file your tax return.|
|Oct. 14, 2021
10 PM ET
|If you filed an extension and wish to contribute to your SEP IRA by the Oct. 15 tax filing deadline, you must initiate your deposit through Betterment by 10 PM ET on Oct. 14, to ensure that your contribution completes by the deadline.|
|Oct. 14, 2020
10 PM ET
|Oct. 14 at 10 PM ET is the deadline for individuals to file their taxes if they filed for an extension. It should be noted that filing for an extension is not an extension to pay as interest/underpayment penalties may still apply. In addition, this is the second deadline for recharacterization of IRA contributions for individuals on extension or amending their timely filed tax return.|
Visit our 2020 Tax Filing Guide for more information about preparing for tax time at Betterment, and visit IRS.gov for more tax information. This tax calendar is by no means exhaustive, but we hope having important dates in one place will be helpful.
Of course, even if you’re aware of these dates and get your tax forms in order, it might still be useful to consult a tax advisor to get personalized help. While Betterment is a financial advisor, we are not a tax advisor, so this tax calendar and article should not be considered tax advice—it’s just informational.
Cash Reserve (“Cash Reserve”) is offered by Betterment LLC. Clients of Betterment LLC may participate in Cash Reserve through their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its affiliates is a bank. Through Cash Reserve, clients’ funds are deposited into one or more banks (“Program Banks“) where the funds earn a variable interest rate and are eligible for FDIC insurance. Cash Reserve provides Betterment clients with the opportunity to earn interest on cash intended to purchase securities through Betterment LLC and Betterment Securities. Cash Reserve should not be viewed as a long-term investment option.
Funds held in your brokerage accounts are not FDIC‐insured but are protected by SIPC. Funds in transit to or from Program Banks are generally not FDIC‐insured but are protected by SIPC, except when those funds are held in a sweep account following a deposit or prior to a withdrawal, at which time funds are eligible for FDIC insurance but are not protected by SIPC. See Betterment Client Agreements for further details. Funds deposited into Cash Reserve are eligible for up to $1,000,000.00 (or $2,000,000.00 for joint accounts) of FDIC insurance once the funds reach one or more Program Banks (up to $250,000 for each insurable capacity — e.g., individual or joint — at up to four Program Banks). Even if there are more than four Program Banks, clients will not necessarily have deposits allocated in a manner that will provide FDIC insurance above $1,000,000.00 (or $2,000,000.00 for joint accounts). The FDIC calculates the insurance limits based on all accounts held in the same insurable capacity at a bank, not just cash in Cash Reserve. If clients elect to exclude one or more Program Banks from receiving deposits the amount of FDIC insurance available through Cash Reserve may be lower. Clients are responsible for monitoring their total assets at each Program Bank, including existing deposits held at Program Banks outside of Cash Reserve, to ensure FDIC insurance limits are not exceeded, which could result in some funds being uninsured. For more information on FDIC insurance please visit www.FDIC.gov. Deposits held in Program Banks are not protected by SIPC. For more information see the full terms and conditions and Betterment LLC’s Form ADV Part II.
View original post