March 23 2020 Market Update
Important Update Regarding Taxes
In light of the news about COVID-19 and the efforts we are all taking to slow its transmission, issues around financial planning and taxes might seem like far-off concerns. To that end, we’ll keep this brief and topical with important news about tax filing deadlines – and some good news about the role of donor-advised funds in troubling times.
Tax filing deadlines
In light of the COVID-19 pandemic, the Internal Revenue Service has extended the tax filing and payment deadlines to July 15, 2020.[1] There will be no interest or penalties levied during that time. Previous guidance indicated that the new payment deadline would apply on up to $1 million in taxes owed by individuals and $10 million for corporations, [2] and we are waiting on more guidance on the updated policy.
For California residents, the Franchise Tax Board has extended the state income tax filing and payment deadline to June 15, 2020. The extension applies to individual filers, partnerships and LLCs, and quarterly estimated tax payments.[3]
Please consult with your tax advisor about your tax situation and how these changes will affect your returns.
Donor-advised funds and our communities
Many of our clients use donor-advised funds as part of their legacy and tax planning. It can be easy to focus on the mechanics and tax benefits of these charitable vehicles, but we also want to point out how critical they can be to communities in times of crisis.
A recent study found that while charitable giving usually drops during downturns, grants from donor-advised funds tend to remain stable.[4] This can provide a critical lifeline to the nonprofits looking to serve their communities.
Given the rising use of donor-advised funds over the past decade, nonprofits will hopefully have continued support over the coming year. Grants from donor-advised funds reached $23.4 billion in 2018, over three times the $7 billion that was granted in 2008.[5]
If you have any questions about your donor-advised fund, please don’t hesitate to contact us.
We are here to help!
Times of stress can make it difficult to focus on issues like tax planning. We’re here to provide support to you and your accountant, and to offer guidance on strategic issues and financial planning. Please don’t hesitate to reach out to us, either via our main phone line or by contacting your advisor directly.
As always, thank you for your continued trust and support of our firm.
JSF Financial
Securities are offered through Mid Atlantic Capital Corporation (“MACC”) a registered broker dealer, Member FINRA/SIPC.
Investment advice is offered through JSF Financial, LLC, which is not a subsidiary or control affiliate of MACC.
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[2] https://www.cnbc.com/2020/03/17/treasury-and-irs-to-delay-tax-deadline-by-90-days.html
[4] https://www.philanthropy.com/article/The-Coronavirus-Outbreak-Could/248247
[5] https://www.philanthropy.com/article/The-Coronavirus-Outbreak-Could/248247