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Tax Filing Changes for 2020

ProActive Tax SolutionsTax Laws 2020 Tax Filing Changes for 2020
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Tax Filing Changes for 2020

This article is current as of March 30, 2020. We will update as new information becomes available.

A few months ago, it was unimaginable that the federal tax filing deadline would be pushed back three months, to July 15, 2020. Last week, Governor Newsom announced that the California state tax deadline would also move to July 15. So much has changed with COVID-19.

This is usually our busiest time of year, so we are taking a deep breath and tracking the tax changes, to better serve you. We want you to know that we are working during this period of time. While we are not meeting in our office with clients, we can easily schedule a Zoom call so we can meet virtually to discuss your current situation or answer questions. We are all facing difficult choices. Many among us are facing dire complications due to this coronavirus pandemic. A little certainty among all the unknowns can help to manage anxiety.

So, we will be sharing information like the formal changes in filing dates detailed in IR-2020-58, March 21, 2020. This announcement about the automatic tax extension deadline came from both the Treasury Department and the Internal Revenue Service. More changes were defined in IR-2020-59, March 25, 2020 and include issues ranging from postponing certain payments related to Installment Agreements and Offers in Compromise to collection and limiting certain enforcement actions. They followed up with an online Q&A.

Changes to Know About Right Now :

  • Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.

 

  • The payments due refers to both 2019 Federal income tax payments (including payments of tax on self-employment income) and 2020 estimated Federal income tax payments (including payments of tax on self-employment income), regardless of the amount owed. The return or payment must be due on April 15, 2020 – this relief does not apply to Federal income tax returns and payments due on any other date.

 

  • Taxpayers who scheduled a payment with their tax return (authorizing an electronic funds withdrawal) may cancel their payment by calling (888) 353-4537. Cancellation requests must be made no later than 11:59 p.m. ET two business days prior to the scheduled payment date.

 

  • Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief.

 

  • Individual taxpayers who need additional time to file beyond the July 15 deadline, can request a filing extension by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004.

 

  • 2019 IRA and HSA payments can be made as late as July 15, 2020.

The IRS is still urging taxpayers who are due a refund to file as soon as possible. They indicate that most tax refunds are still being issued within 21 days.

IRS Commissioner Chuck Rettig said, “Even with the filing deadline extended, we urge taxpayers who are owed refunds to file as soon as possible and file electronically. Filing electronically with direct deposit is the quickest way to get refunds.”

Has the Local Property Tax Deadline Changed?

In Marin County, the date to file the second installment of your property tax bill is still April 10, 2020. Some of you have called to ask how the county can process payments if their offices are closed. That is a moot point, since the localities are not allowed to amend the deadline date. Only the state can do that.

How Are Small Business Owners Faring?

Goldman Sachs conducted a survey of small business owners about the impact of the coronavirus on their businesses. The results may be similar to what you are experiencing:

Survey of Goldman Sachs Customers On What They Are Experiencing

infographic-goldmansachs

Since it is impossible to know how long this situation will continue, we will devote time and attention to staying informed of the changes as they occur. To assist all of us in that effort, the IRS promises to continue monitoring issues related to the COVID-19 virus, and provide updated information they’ll post on a special coronavirus page on IRS.gov.

Call our Corte Madera office today (415) 924-6240 if you have questions. We are here to help and can schedule a Zoom call easily if you have in-depth questions or concerns. We can get through this together, while physically apart.