2020 Tax extensions you should know about
The coronavirus pandemic has led the IRS to extend important tax deadlines in 2020. This is the first time in my recent memory that the IRS has extended the filing date, so it's important to plan accordingly and take advantage of it!
Here is what you need to know:
July 15 is the new April 15
The usual April 15 tax deadline has now been automatically extended to July 15, 2020. This extension gives extra time to file and pay. It applies to individuals, corporations, estates, and trust tax returns. This is a sign of relief for many as the pandemic has created financial challenges. Taxpayers will have no interest or penalties on these payments, no matter the amount owed, until after July 15.
If you expect to receive a tax refund, the deadline extension will not delay your refund, so we encourage you to continue to file as soon as possible if you have not done so already. Refunds take about 21 days to process from the IRS.
What about IRA contributions? And, what if I make quarterly estimated tax payments?
Good news! July 15, 2020 is also the deadline to make Traditional/Roth IRA contributions and 1st & 2nd quarter estimated tax payments. The 2nd quarter estimated tax payment generally due June 15th, 2020 has been pushed back to July 15th as well. This is a great time to consider perhaps making a contribution to take advantage of the tax savings and lower stock market prices.
Does the new July 15 deadline affect the October 15 deadline to file an extension?
No. If you need more time to file your return, the deadline to file an extension remains at its usual date of October 15th, 2020. There has been no announcement from the IRS on this deadline changing as of now. If you know you will need an extension, we encourage you to submit form 4868 Application for Automatic Extension of Time to File U.S. Individual Income Tax Return as soon as possible. Remember that this request is only to file, not to pay, so it's important to calculate the balance due, if any, by July 15, 2020.
Pass-through entities extended due dates continue to remain September 15th, 2020.
We hope this extension provides relief to our clients during this time. Once again, we do recommend that you take action sooner rather than later. Do not wait until the last minute. Reach out and contact us if you have concerns. We will work with you to find the best solutions and ensure returns are filed in a proper and timely manner!
Chris Boyer, EA
Guest contributor: Kaitlin Boyer