Preparing for the tax deadline is normally a process of gathering documentation together, scheduling a meeting with your accountant, and going to their office to discuss how the past year has gone. However, with the unprecedented times that we are dealing with due to COVID-19, this tax deadline is proving to be a much different story than in past years. There are many additional considerations for tax year 2019 and planning and preparing well are some of the best ways to ensure a smooth filing during this rough time.
Many taxpayers have gotten accustomed to the shoebox filled with receipts and documents to drop off to their accountant every year. In a more virtual, online world this tradition has been slowly fading away, and in a COVID-19 world, it is quickly becoming a thing of the past. Many offices all around the country, and even the world have been closed and the workforce has shifted to a telecommuting rat race. When it comes to handing in your tax documents, this has shifted to a more electronic process of scanning in documents and emailing them rather than physically dropping them off to the office.
The biggest change this tax season has been the extension of the tax deadline from 4/15 to 7/15. The IRS announced this extension to offer relief to taxpayers by granting additional time in order to file and pay their taxes. There was discussion about pushing the deadline back even further, however, the IRS announced on June 30th that they will not be extending the deadline beyond July 15th. Taxpayers who still need more time can file an extension as in previous years, which would extend the filing deadline to October 15th, 2020. As always, this extension extends the time to file, but not to pay. All taxes due must be paid by July 15th. For those taxpayers suffering from liquidity issues as a result of the current environment, the IRS offers payment plans that may help mitigate interest and penalties due to late payments.
Estimated Tax Payments
The deadline extension has not only affected tax filings, but estimated tax payments as well. The 1st and 2nd quarter estimated payments were both pushed back from April 15th and June 15th, to July 15th. This means that for taxpayers filing their tax returns and making estimated quarterly payments, they will need to make all of these on July 15th.
The deadline extension has also extended the time to make an IRA or HSA contribution for 2019. This means that taxpayers who plan on contributing to an individual retirement account or a health savings account will now have until July 15th, 2020 to do so.
As always, HBK is here to help with any of your tax compliance needs. If you have any questions regarding the tax deadline, please contact your HBK tax advisor.