Tax Deadline Deferred To July 15th. Here’s What You Need To Know.
The federal government has made a litany of efforts to alleviate the pain of this global crisis – albeit mostly by throwing money at the problem - but hey, we’ll take it.
As new cases of coronavirus continue to flow into hospitals around the country, we are maintaining a watchful eye on the related financial measures being made and how they will affect you, our readers.
The three major moves made recently are:
- Federal stimulus check of $1200 for anyone who makes less than $75,000 (or household less than $150,000).
- The first $350 Billion PPP injection for small businesses was dispersed in 14 days and a second $450 Billion lump sum will be lent/given out very soon depending on use.
- Federal Income Tax deadline to file will be pushed to July 15 and all penalties before then are omitted.
So what does the tax deadline deferment actually mean?
Firstly, for all taxpayers, the deadline to pay your taxes from 2019 is now pushed back three months from the conventional date of April 15th to the COVID adjusted date, July 15th. This means that you have another few months to either collect funds for your 2019 tax bill or, if you do not have the funds immediately available, you can wait until filing in July to begin the accrued interest penalty.
Taxpayers do not need to contact the IRS or any legal agency, merely proceed as usual and be aware of the new deadline. It is still encouraged that you file as soon as possible, especially if you are expecting a refund. The IRS says that most refunds are still being realized within 21 days of filing.
Self-employed taxpayers who would normally have had to make April 15 or June 15 quarterly estimated tax payments for 2020 also have the additional three months to pay.
Non-filers and Late Payments
If you do not plan to file a tax return, the IRS has launched an online portal for non-filers that allows you to register for the aforementioned CARES Act payment (up to $1200).
For those that have to come out of pocket, it is important to note that all penalties and interest payments are suspended between April and July. While we would never suggest not paying your taxes, this is simply a matter of liquidity that many persons and businesses are struggling with. If you generally do not pay your taxes on time, you are subject to a 0.5% penalty per month that you are late.
For anyone who is on an installment plan from 2018 taxes, these payments are also deferred at no interest or penalty between April 1st and July 15th.
Filling for an Extension
If you plan to file for a payment extension, you must also do so by July 15th. This extension will grant you an additional 3 months before a full payment would be due or an installment plan would begin. Do note that even if you file an extension, the same accrued interest rates apply (~3% per year) but the actual amount owned would not need to be collected until October 15th. After this Oct 15 date, any funds not collected by the IRS would incur a 0.5% monthly penalty going forward.
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