How To Handle The New July 15 Tax Deadline

How To Handle The New July 15 Tax Deadline

03/20/2020 Tags: Announcements, In the News, COVID-19, Tax Deadline

The following was prepared immediately after the tax deadline extension had been announced. It does not reflect any subsequently issued guidance or further legislative activity. Please check with your Casey Peterson professional for the latest information

U.S. Treasury Secretary Steven Mnunchin announced today that the April 15 tax deadline has been moved to July 15.

Earlier, the Treasury Department had pushed the tax payment deadline to that same date.

“All taxpayers and businesses will have this additional time to file and make payments without interest or penalties,” Mnunchin wrote in a tweet.

Why You Should Still File as Soon as You Can

Despite the new deadline, you should consider filing sooner rather than later, and that’s for a few reasons.

First, if you’re getting money back from the government, the sooner you file, the sooner you’ll have that money, which could come in handy during these turbulent times.

Second, even if you owe money, the sooner you file, the sooner you can start planning and being proactive about your situation. The coronavirus health crisis has left most people with a lot of questions about their financial situation. The more information you have now, the more you can do to plan.

Third, if you run a small business or C-corp, filing will help you figure out your financial situation as well. Your latest financial documents will be vital information to have when it comes to filing for business loans or disaster relief as it becomes available.

No matter your situation, don’t forget we’re always here to help you navigate your finances!

Deadlines for Quarterly Taxes and Retirement Funds

There is also a grace period for if you pay quarterly estimated taxes. You can also delay the Quarter 1 - April 15, 2020, and Quarter 2 - June 15, 2020, payment until July 15, 2020, automatically.

And the July 15 deadline also applies to Traditional IRA and ROTH contributions for 2019.

How Extensions and Deadlines Work

Under normal circumstances, taxpayers already have the option to request a six-month extension to file their returns. However, beyond the new 90-day payment grace period, filing an extension doesn’t postpone the deadline to pay any liability you owe. That bill would continue to accrue interest and penalties until you pay it.

For now, the IRS is still processing tax returns and paying out refunds as usual. So, if you’re expecting a refund, you still need to file your return to get your refund.

The IRS recommends e-Filing and choosing direct deposit to get your refund as soon as possible and offers free online tax prep and filing software. If you need assistance with e-Filing, we're always happy to help.

Businesses and Individuals Affected by the Coronavirus

For small businesses, President Donald Trump instructed the Small Business Administration to provide loans to help small businesses that have been disrupted by the virus.

For impacted individuals, they can file what’s typically called a “financial hardship extension.” Those who can’t pay their necessary living expenses — like their rent or mortgage, utilities, food, healthcare, or transportation — can file for that extension.

How does the hardship extension work?

Even if you’re not sure if you can pay your taxes for whatever reason, you should always file your return by the deadline. If you find out you can’t pay your full tax bill, contact the IRS right away.

They might be able to provide some relief, like:

  • A short-term extension to pay.
  • An installment agreement.
  • An offer in compromise.

They might also temporarily delay collection by reporting your account as currently not collectible until you can pay. And in some cases, the agency may be able to waive penalties. But they won’t waive interest charges that accrue on unpaid tax bills.

You also might be able to pay your bill in installments.

The IRS has recently posted a FAQ page to help answer questions about the updated filing deadlines and extensions. Our tax professionals are also happy to help you navigate the changes. Contact us today.

This communication is intended to provide general information on legislative COVID-19 relief measures as of the date of this communication and may reference information from reputable sources. Although our firm has made every reasonable effort to ensure that the information provided is accurate, we make no warranties, expressed or implied, on the information provided. As legislative efforts are still ongoing, we expect that there may be additional guidance and clarification from regulators that may modify some of the provisions in this communication. Some of those modifications may be significant. As such, be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed.

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