Posted by Jeffrey Feingold on 04.01.20
Last week, the Treasury Department and the Internal Revenue Service announced a special tax filing and payment relief to individuals and businesses in response to the COVID-19 outbreak. The filing deadline for federal tax returns has been extended from April 15 to July 15, 2020. Each state may consider its own relief, but it’s best to assume you still must file and pay any states if owed by April 15, unless state guidance is issued. Although the new tax deadline is now July 15 due to the coronavirus pandemic, the IRS is still accepting returns and processing refunds.
Who Does this Extension Help?
Taxpayers who owe money are now able to defer their federal income tax payments which would have been due on April 15 to July 15. They will not have any penalties or interest, regardless of the amount owed, giving you an extra 90 days to pay.
Should Taxpayers Wait to Make Contributions to IRAs?
Yes! The due date for filing federal income tax returns is postponed to July 15, and the deadline for making any contributions to your IRA for 2019 is also extended to July 15, 2020.
Is There a Better Chance of Being Audited Now?
The IRS has stated it generally won’t start any new audits, and it will suspend in-person meetings with taxpayers currently under exam through July 15, 2020.
Do I have to File a Special Form to Use the July 15 Deadline?
No. If you file a return or an automatic extension request and pay your tax due by July 15, no interest or penalties will be owed.
Will Tax Refund be Delayed till July 15?
The Internal Revenue Service said most tax refunds are still being issued within 21 days.
Should and Can Taxpayers File Now?
Yes. Many tax service companies remain up and running during this time. While there is now an extension to file, you still have to file, just at a later date. You can help keep the process moving by providing your tax advisor with the information they need.
As you plan your 2019 year-end tax strategies, remember Tax Point Advisors provides specialty tax services to CPA firms and their clients throughout the U.S. All of our Tax Point Advisors are currently working remotely and can answer any questions that may arise regarding this extension. To speak to one of the experts at Tax Point Advisors, please call us at (800) 260-4138 or please leave us a message below.