Sadly, there has been little NOT affected by the new and unseen crisis in our world today. COVID-19 has affected not only the health of thousands of Americans, but more importantly the economy altogether.
Taxes are no exception!
In the last few weeks we have been seeing, global changes being made every hour! One of the newest developments in our country is the change of the tax deadline.
TAX DEADLINE
CNBC released an article that says, “As part of its coronavirus response, the federal government will give filers 90 days to pay income taxes due on up to $1 million in tax owed, Mnuchin said in Washington. The reprieve on that amount would cover many pass-through entities and small businesses, he said. Corporate filers would get the same length of time to pay amounts due on up to $10 million in taxes owed, Mnuchin said.” (Mercado, 2020). https://www.nbcnewyork.com/news/coronavirus/treasury-and-irs-to-delay-tax-payment-deadline/2331252/?fbclid=IwAR0781xkNPRyHS3UhSN4jXjoXGM8X1yPsLChdS_KhRsKJj72-01K_jlJHbY
So what exactly does this mean for you?
Well the IRS recently released a notice that clarifies that, “The Secretary has determined that any person with a Federal Income Tax payment due April 15, 2020, is affected by the COVID-19 emergency for purposes of the relief described in this section III (Affected Taxpayer). For an Affected Taxpayer, the due date for making Federal income tax payments due April 15, 2020, in an aggregate amount up to the Applicable Postponed Payment Amount, is postponed to July 15, 2020” (Auchterlonie, 2020). https://www.irs.gov/pub/irs-drop/n-20-17.pdf?fbclid=IwAR3ZMBbAlXmWELxz4SI41H7cDrQJz3Fl_TGvLmin1K1FRwG-J9TsFnVlDU4
WHAT DOES THIS MEAN FOR ME?
This simply means that you now do not have to file or pay until July 15th, 2020. If you feel that there is no way that you could get everything done to file by April 15th or even July 15th, then you can file or ask your accountant to file an extension for you. An extension pushes your filing date but to October 15th, but remember, even if your tax filing is not due until October 15th you will still have to PAY by the new tax deadline of July 15th – so file SOONER rather than LATER!
This of course is all dealing with federal taxes that are due. The AICPA has also put out a state guide so you can keep up with what is happening in your state. https://www.aicpa.org/content/dam/aicpa/advocacy/tax/downloadabledocuments/coronavirus-state-filing-relief.pdf. As you can see certain states such as Alabama, California, Indiana, and Massachusetts (just to name a few) have also put out some state specific information as well.
5 THINGS YOU CAN DO TO PREPARE
Fortunately, something that has not been pushed back our Americans refunds! Mnuchin was very clear in saying if you want your return, file NOW! Yahoo finance says, “What remains unchanged after Friday’s announcement is that taxpayers who expect a refund can file right now and get their payments once the return is processed”. (https://finance.yahoo.com/news/irs-extends-tax-deadline-to-july-15-from-april-15-143136026.html)
With this information there are a few key things that you will want to do to still have a smooth 2020 tax season!
- File now if you want your refund
- You won’t be totally off the hook for your tax bill so save up now
- Even if you file an extension and file later, make sure you keep on top of everything so when October 15th you won’t be late in filing
- Continue to track income and expenses so that when it comes time to file you are ready
- Continue to make estimated tax payments IF you can. This will help to ensure you don’t owe later
In all this, we see that the government is doing their best to look out for the everyday and upcoming worries that we have as a society in this time of crisis.
As far as Taxanista goes, we are here for anything that you might need, and we encourage everyone to stay safe and together is this trying time.
Call our number at 480-331-3316 if you need any tax advice with these new changes, or just a friendly reminder that we are all in this together!
