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Four Money Questions to Ask Yourself in March

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Note: All tax deadlines contained in this article are the deadlines set forth by the IRS. In the event of any changes to the 2020 IRS tax filing deadlines, we’ll update the below information as soon as possible. 

Hello, March! Feels like we just got started in the new year, but we are closing in on the end of the first quarter, and that means a financial spring cleaning is in order.

To kick things off, we’ve got four questions that could help you spring ahead this season.

1. When are taxes due this year?

In 2020, Tax Day is July 15 for everyone. Paperwork never seems to get more fun, so we’ve got some things to get you started:

  • We’ve got a Tax Season Guide that can give you some background on the whys and hows of tax season that could help DIYers. 
  • These are some of the documents you’ll need on hand: W-2s, 1099s, investment or interest income or payment statements.
  • Here are some after-filing tips for what tax records you may want to hang on to (and for how long).

2. Expecting a refund? What’s your plan for it?

Refunds can feel like a reward for pulling together all that paperwork. But truth is, it’s really money you already earned.

With that said, does a refund still feel like a license to splurge, or do you want to do a little celebrating and maybe a little planning?

Here are some ways you can divvy up your refund and do a little of each:

If any or all of these seem like things you’d be into, we have some tips about how you could use that refund as a financial springboard. For example, if the vacation you’re thinking of is a year away, a certificate of deposit could be a way to go (and this article about travel fees could help you get a bit more out of the money you banked), while this article about retirement savings strategies could help you use your refund to build out a longer-term plan.

3. Have you emptied your FSA account? 

If you’ve got 2019 funds left in your Flexible Spending Account (Flexible Spending Arrangement in IRS-speak) you may have until March 15 to use the money for qualified medical expenses and/or roll over up to $500 depending on your plan. To find out if your employer’s health plan includes this extension, ask your Human Resources department. If you do, we say think fast because the money you don’t use or can’t rollover disappears, and you won’t get a refund.

So, what can you spend that money on? If it’s something that requires a prescription and it’s for you or anyone listed on your tax return as dependent, you can probably tap your FSA for the money. For a comprehensive list of qualified medical expenses, the list starts on page 5 of this IRS publication. Sadly, health insurance premiums are on the list of things you can’t pay for with FSA cash. 

4. Have you taken your first RMD?

If you turned 70 ½ in 2019 and saved money in retirement plans listed below, you need to take your first required minimum distribution by April 1, 2020 or pay a penalty of 50% of the amount you didn’t withdraw. This April date is a one-shot deal; moving forward you’ll need to take your next RMD and every one after that by December 31.

These are some of the retirement accounts affected:

  • Profit-sharing plans
  • 401(k) plans, including Roth 401(k) plans
  • 403(b) plans
  • 457(b) plans
  • Traditional IRAs
  • IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs

If you’re wondering if the SECURE Act changed your RMD date, the short answer is talk to a tax professional but probably not, if you turned 70 ½ in December. 

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Getting a refund this tax season? Make your money go further when you open a Marcus Online Savings Account.

This article is for informational purposes only and is not a substitute for individualized professional advice. Individuals should consult their own tax advisor for matters specific to their own taxes and nothing communicated to you herein should be considered tax advice. This article was prepared by and approved by Marcus by Goldman Sachs, but does not reflect the institutional opinions of Goldman Sachs Bank USA, Goldman Sachs Group, Inc. or any of their affiliates, subsidiaries or division. Goldman Sachs Bank USA does not provide any financial, economic, legal, accounting, tax or other recommendation in this article. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice.  Information contained in this article does not constitute the provision of investment advice by Goldman Sachs Bank USA or any its affiliates. Neither Goldman Sachs Bank USA nor any of its affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements or any information contained in this document and any liability therefore is expressly disclaimed.