There have been many tax impacts from the Coronavirus relief efforts implemented recently. We wanted to pass along some information that you may find useful. Please be aware that there may be even more changes in the upcoming days or weeks, and there is certainly some clarification needed for changes that have already been made. This is simply a summary of changes to the tax laws as of now:
The Federal tax deadline has moved from April 15th to July 15th, per U.S. Treasury Secretary Steven Mnuchin. These announcements were made on Tuesday, March 17, 2020 and Friday March 20, 2020 with payment and penalty delays confirmed by an IRS notice.
Individuals, trusts, estates, partnerships and corporations who owe the IRS money will be able to defer payments for 90 days without interest or penalties. The new effective payment due date is July 15, 2020.
The delay also includes first quarter, 2020 estimated tax payments for individuals. These payments are now due on or before July 15, 2020.
While the federal government grants you an additional 3 months to pay your 2019 taxes, you may wish to file an extension or still file your tax return by April 15. Here are some thoughts on different situations.
If you anticipate a refund: The IRS is urging you to file as soon as possible and to file electronically.
If you cannot complete your tax return by April 15, consider filing an extension. This moves your filing deadline to October 15. In the case of an extension under these new rules, your tax return would be due on or before October 15, 2020, but your tax payment is now due on or before July 15, 2020.
States are rolling out their own guidelines for extensions. Some are waiting on the IRS, while others are acting independently. Since most states require copies of federal tax return information, be prepared to still file by April 15. Remember, even if you wait until later to file your federal return and pay your tax, you may have to file your state and/or local return sooner. Here is a link to the AICPA State Filing Guidance for Coronavirus Pandemic: www.aicpa.org/
The deadline for making deductible IRA contributions remains April 15th.
If you wonder what is schedule C on a tax return, read the basics of a Schedule C form for freelancers in this article.
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