The end of the year is fast approaching, and there are several key financial deadlines that you should be aware of. Let’s start with some suggestions for navigating year-end transactions smoothly.
Year-End Best Practices
- Initiate year end transactions early: Don’t procrastinate. Allow ample time for trades and special requests to settle.
- Use eSignature for faster processing: Transactions initiated with eSignature have significantly faster cycle times – often as fast as 15 minutes end to end.
- Send checks for deposit early: Incoming deposits are subject to a 4-business day collection period prior to being redistributed and due to Covid-19 mailed deposits may take longer.
Key Year-End Deadlines
2020 Required Minimum Distributions: December 31*
*Completed distribution form due to Capital Advantage: December 18
The CARES Act allows you to waive your required minimum distributions in 2020, however, if you have elected to take your RMD, the last day to request a 2020 retirement distribution is December 31.
To help ensure that we are able to process your distribution by year end, we strongly recommend that a completed distribution form is received in good order no later than December 18, 2020. Submitting requests by December 18th allows ample time for the transfers to be completed.
2020 Qualified Charitable Contributions (QCD’s): Early December
Qualified Charitable Contributions (QCD’s) may still be made. Clients 70 ½ and older may direct up to $100,000 tax free from their IRA’s to operating (501-3-c) Charities, (not including Donor Advised Funds), even though RMD’s are waived for 2020.
Don’t wait until the last minute–donate in early December 2020. It may take time for a charitable organization to process your donation and all checks must clear by December 31st to be counted in this year.
2020 ROTH CONVERSIONS: December 31*
*Completed conversion forms due to Capital Advantage: December 14
Roth IRA Conversion Distributions from a Traditional IRA, Rollover IRA, SEP-IRA and SIMPLE IRA must be made on or before December 31, 2020, and converted to a Roth IRA within 60 days after the date the amount was received in order for the income to be included in gross income for 2020.
To help ensure your Roth Conversion is processed by December 31, 2020, we strongly recommend that a completed Roth IRA Conversion form is received in good order on or before December 14. Conversion forms received after December 14 will be processed on a best effort basis up to December 31, 2020.
Retirement Plans and SEP-IRA: December 31*
*Plan paperwork due to Capital Advantage: December 31, 12:00 p.m. PST
The IRS deadline to establish new 2021 calendar year Retirement Plans is December 31, 2020. We will accept plan paperwork until 12 noon on December 31, 2020. Clients who wish to establish a new SEP-IRA for 2020 have until their tax filing deadline (including extensions) to establish and fund a SEP-IRA. Employer plans have until their tax filing deadline (generally April 15), plus extensions, to fund their plan for the 2020 tax year.
If you have any questions, please contact your Capital Advantage Client Service Associate.