3 Tax Moves to Make Before July 15

In 2020, July is the new April with respect to Tax Day. Back in March, the Treasury Department postponed Tax Day for three months amid the coronavirus shutdowns and skyrocketing unemployment. Now that the July 15 date is rapidly approaching, it's about time to tie up any loose tax details you may have left hanging back in March.

You should also know there is talk of another postponement, this time until September. But that's not guaranteed just yet. And even if Tax Day is put off again, there's no harm in getting organized around your tax situation early. Make these three tax moves now, or if the date gets bumped again, put them in your calendar to implement in September.

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1. Make a deductible IRA contribution

You can still get a deduction on your 2019 taxes by making an eligible contribution to your IRA before Tax Day. If you don't participate in a 401(k) at work, you can contribute up to $6,000 in a traditional IRA, plus an additional $1,000 if you're over 50. Those amounts are tax-deductible for 2019 as long as you and your spouse don't participate in a 401(k) at work. When there's a work retirement plan in play for either of you, the deductibility of your IRA contribution is subject to the income limits shown in the table below.

Table data source: IRS.gov

The income numbers here refer to Modified Adjusted Gross Income, which isn't a number you'll find on your tax return. You have to calculate it by adding untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest to your Adjusted Gross Income, which is the number on Line 8B on your 2019 1040 form.

2. Contribute to your Health Savings Account (HSA), if you have one

HSA contributions are fully tax deductible, without income limitations. The 2019 HSA contribution limits are $3,500 for individuals and $7,000 for families. Anyone aged 55 and older gets an extra $1,000 in catch-up contributions, which bumps those caps up to $4,500 for individuals and $8,000 for families. If you qualify for an HSA, it's a great way to save toward healthcare expenses.

3. Pay first- and second-quarter estimated tax payments for the 2020 tax year

According to the IRS, if you expect to owe $1,000 or more when you file your tax return, you should make quarterly tax payments. July 15 is the due date for any tax shortfall on income earned between January 1 and May 31 of this year.

There are two main reasons you'd owe taxes. Either your withholding at work was insufficient, or you earned other income that wasn't subject to withholding -- such as taxable dividends, taxable realized gains, and side hustle or self-employment income.

You can use 1040-ES or a reliable tax software to calculate your quarterly tax payments. If you earned wage income this year, you might also try using the IRS tax estimator. This calculator is designed to help you optimize withholdings from your wages, but it does consider self-employment and unemployment income when it estimates your annual tax obligation. That can help you gauge where you are today and strategize your tax plan for future quarters.

If the current tax dates remain, you'd make another quarterly tax payment on Sept. 15 for income earned June 1 to Aug. 31. Taxes on income earned between Sept. 1 and year-end will be due by Jan. 15, 2021.

Keep your tax bill to a minimum

Making deductible contributions to your IRA and HSA before Tax Day cuts your tax liability for 2019. And keeping up with your quarterly tax payments helps you sidestep underpayment penalties and interest for the 2020 tax year. If the July 15 deadline holds, be ready to pull the trigger on these actions. Or, if the Treasury Department pushes Tax Day back to September, use the next two months to save up the cash you need to fund those contributions and tax payments.