What to Know About the Delayed 2020 Tax Filing Deadline

If you’ve been watching the news headlines with the Coronavirus pandemic, then you’ve probably seen that the federal government here in the United States pushed back the tax filing deadline for this year. Many states have followed suit, giving tax payers an extra few months to take care of the tax filing and submit their payments for year 2019.

It isn’t common for the tax due dates to change, which is why it is important to stay up-to-date on the current situation. Your accounting or tax filing expert can provide advice to help you manage the correct timing and filing strategy for your small business taxes.

IRS: National Emergency Declaration

The IRS has the authority to call a National Emergency Declaration, which is the decision that has been made regarding the current Coronavirus pandemic.

It is rare for tax deadlines to be changed. But the federal task force can see how the current economic situation and emergency needs have affected the population as a whole. Many areas are under “Stay Home” orders, which impacts businesses, individuals, and typical daily activities.

There are extraordinary times, and the IRS is providing a bit of relief by pushing back the standard deadlines.

Tax Returns and Tax Payments

The IRS has offered relief for taxpayers by changing the normal deadline of April 15th to 90-days later. This year, federal tax returns need to be filed by July 15, 2020. Additionally, tax payments are also due this day.

Why was the decision made to push back the tax deadline? Here are some of the factors that played into this decision:

  • Social Distancing: Citizens have been asked to practice social distancing or to stay at home, depending on your location. For some people, social distancing makes it a challenge to get the taxes prepared and filed on time. If you usually meet with your accountant in person, then you might need a little extra time to work through the necessary details so your taxes are accurate and ready for filing by the deadline.
  • Economic Support: The economy has been impacted by the Coronavirus, and the federal government is looking for ways to put money back in the hands of taxpayers. Millions of people are out of work because businesses have been closed. Pushing back the tax payment deadline means that more people can keep money in their bank account to offset the unexpected costs of living right now. This delay in tax payments will make it a little easier for families to keep up with rent and groceries.
  • Interest Delay: Usually, a late tax payment accrues interest costs and penalties. With the current deadline delay, tax payers have an extra 90 days to pay before the interest and penalties are accrued.
  • Timing of Processing Returns: Spreading out the tax filings might also be beneficial for the IRS so the processing and accepting tax refunds can be spread out a little more. It is important to note that the IRS is still working on tax refunds in the current situation, so it might not make sense for you to wait on your filing. For example, if you are anticipating a tax refund, then it is smart to file your tax return as soon as possible so you can receive your refund check.

As you can see, the people who will benefit the most from delaying tax filings and payments are those who need to send money to the IRS for the current tax return. Also, if you need more time to complete your tax filing, then you can file for an extension which will push your filing date back to October 15, 2020.

Tax Filing Deadline: Who Can Delay Filing?

This change in tax filing deadline applies to many people across the country, including “All tax payers who file and pay their federal income taxes on April 15,” and “All individual returns, trusts, and corporations.” Basically, the changed deadline applies to every business and individual in the United States. The new tax filing deadline affects you if you fall into any of these categories:

  • Form 1040 Filers (Individuals)
  • Form 1041 Filers (Trusts)
  • Form 1120 Filers (Corporations)
  • Fiscal Year Partnerships

The new filing deadline on July 15, 2020 should be treated the same as the normal deadline on April 15, 2020. All tax returns and payments should be submitted by July 15, 2020 unless you have made other arrangements, such as a payment plan or tax extension through the IRS.

Keep in mind that this news should not affect you if you are anticipating a tax refund. If you delay your tax filing, then it will delay the time in which you receive your tax refund as well (if owed one). In fact, it is recommended that you file as soon as possible so you can receive the refund without delay. Most tax refunds are received within 21 days of filing the tax return.

Other Notable Details about the New Tax Filing Deadline

Here are a few other notable facts about the tax filing deadline for this year:

  • Tax Deferrment Limits: There are no limits on the amount of money that you can defer. The full tax payment can be pushed back by 90 days without a concern about interest and fees.
  • Estimated Payments: As a small business owner, you likely have estimated payments that need to be sent several times a year. This deferral applies to some of the estimated payments, including self-employment taxes. It is based on the deadline for the payment date. For example, the first quarter estimated payment usually needs to be sent by April 15, 2020 – but this estimated date has also been pushed back to July 15, 2020. The deferral does NOT apply to the second quarter tax payment, which is due as-usual on June 15, 2020.
  • State Tax Deadlines: Every state is different in the way the tax deadlines are handled. Usually, the state deadlines line up with the federal deadlines. But these state-to-state decisions are made on a case by cases basis. It is important to check on your state guidelines and deadlines so you don’t miss due dates that might be different between states and federal departments.
  • Interest Accural: Just because the tax deadline has been delayed, it doesn’t mean that you don’t have to pay taxes on 2019 income. Instead, you have a little more time to figure out the tax return filing and prepare the payment that needs to be sent. If the owed amount is not paid by July 15, 2020, then interest costs and penalties will start accruing beginning July 16, 2020. If you are required to file taxes, this deferral does not make you exempt or excluded from the need to file this year.
  • Is it Automatic? Yes, the new tax filing deadline is automatic. There is no need for you or your accountant to apply for an extension. You have an extra 90-day period to complete your tax return and payment.
  • Tax Extension Deadlines: If you need additional time after April 15, then you can file for an extension by using Form 7004 or Form 4868. The new tax return extension request is July 15, 2020. In the case where your request is granted, your payment still needs to be submitted by July 15, 2020. But you have until October 15, 2020 to complete your tax return. Filing for an extension might be needed if you have a complicated return that will take a little more time to complete.

Why Hire an Accountant for Tax Prep Services

When you have an expert helping with your tax preparation, you can rest assured knowing that you are avoiding some of the most common issues encountered with DIY tax filings. Missed deadlines, mistakes on the tax forms, and other issues can result in expensive fees and interest costs.

It can be hard to maintain the responsibility of running a business while still keeping up with the tax deadlines that need to be addressed throughout the year. Plus, it is a great investment to hire an accountant for professional tax services because you can maximize the potential tax writeoffs that are available for your small business.

Need More Information about Tax Filing Deadlines?

You can find plenty of information online about filing individual or business taxes, but it can be hard to sift through the information and find the details that apply to your unique situation. If you don’t have formal training in accounting and you don’t keep up with the changes in the tax industry, then the best solution is to hire an experienced accounting team to assist with your tax preparation, tax filing, and ongoing financial support.

The simplest way to get more information about the new tax filing deadlines is to pick up the phone and call our experienced team at Easier Accounting. We specialize in small business accounting services and can assist with all of your bookkeeping and accounting needs. Contact us any time at (888) 620-0770.

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