4 Valuable Tips to Help You Navigate Tax Season

It’s that time of year again. Tax season is upon us and we want to make sure you have the resources you need to successfully file your taxes.*

1. Important tax dates that you should take note of

   1. February 12th marks the beginning of tax season

   2. The first business day in March usually marks the beginning of refund issuance

   3. April 15th is the deadline

   4. You can request an extension to October 15th

2. Tax tips for IRA holders

   1. You can make contributions that count toward the 2020 calendar year up until April 15th. For example, if you received your second stimulus check last month, you may want to consider putting that money into your IRA and counting it toward 2020 contributions.

   2. We recommend that you look at your account statement to confirm your prior and current year IRA contributions. In May, financial institutions will begin sending out Form-5498 which can be used as the official confirmation of your prior year IRA contributions.

3. Tax tips for pastors

   1. If you receive a housing allowance, do not claim that on your taxes! This is tax-exempt and is a great way for your church to bless you. 

   2. Additionally, if you have a 403(b)9 through your church, you can specify a certain amount equal to your housing allowance to contribute tax-deferred. Then, in retirement, if your church issues an official letter that you may withdraw a housing allowance from your retirement fund, you can do so, untaxed. This strategy can save you thousands in tax payments over the decades.

4. Tax tips for retirees

   1. 1099R forms must be filed for each fund or organization from which you have taken a distribution. This includes:

      1. Profit-sharing or retirement plans

      2. Any individual retirement arrangements (IRAs)

      3. Annuities, pensions, insurance contracts, survivor income benefit plans

      4. Permanent and total disability payments under life insurance contracts

      5. Charitable gift annuities, etc

   2. For more information on 1099Rs, click HERE.

As always, we recommend speaking with a Certified Professional Accountant for details, instructions, or additional help while filing your taxes. If you have questions about your investments or need a form that you cannot find, reach out to our Client Services Team by email or phone (during normal business hours) at (888) 879-1376.

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* Envoy does not offer legal or tax advice and encourages that you consult with a lawyer and/or professional tax advisor for personalized tax advice.

I’m Getting Ready to Retire. What Should I do with My Money in My Retirement Account?

Are you retired or about to retire and wondering what you should do with the funds in your retirement account? Here are a few options:

Option 1: Depending on your balance, you can keep the funds invested in your retirement plan. If you like the funds you’re investing in, it makes sense to just leave the account where it is. However, you can no longer contribute to your retirement account once you are separated from employment.

Option 2: You can rollover the funds to an IRA with Envoy Financial or another financial institution that handles IRAs. This will give you more control over your investment options and saves on taxes as rollovers are tax free until you take a distribution from the IRA.

Option 3: You can take a partial or full distribution of the account. This is one of the least desirable options. If you do this, 20% will automatically be withheld from your funds withdrawn as a prepayment of federal taxes. If you are under the age of 59.5, you may owe an additional 10% early withdrawal penalty on anything not rolled over.

If you have other questions and would like to speak with an advisor, we’d love to help lead you in the right direction.

Make sure you’re prepared for retirement. Get some valuable tips on how to make sure you’re financially prepared for retirement.