Tax Deadline Extended! What Does It Mean for You?
On March 21st, 2020 the Treasury Department and Internal Revenue Service (IRS) announced that the federal income tax return filing deadline was automatically extended from April 15th, 2020 to July 15th, 2020 (automatically, meaning no forms need to be filed for such extension to apply).
Included in this relief announcement was the extended due date for certain tax payments normally due April 15th, 2020, such as estimated tax payments (for individuals, corporations, and trusts) as well as income taxes due on this date. Therefore, these payments due on April 15th, 2020 can be paid by July 15th, 2020 without the addition of penalties and interest.
It is important to note that no relief has yet been provided for the deadline of certain entities that had a due date of March 16th, 2020 (mostly flow-through entities such as partnerships and S Corporations). However, it is anticipated that the IRS will be lenient in their penalty abatement process. The leniency is expected because the deadline occurred right as the government was beginning to wrap its arms around the COVID-19 pandemic.
Some taxpayers may need additional time to file their tax returns beyond the new deadline of July 15th, 2020. The IRS reminds us that those taxpayers needing the additional time must file the appropriate form for an extension by July 15th, 2020. As of today, it is not clear if the additional 6 months extension these forms normally allow will be from the original due date or the new due date. We encourage clients to consider October 15th, 2020 to be the extended due date when filing Forms 4868 and 7004.
Lastly, we strongly suggest our clients continue to make every effort to provide all the information necessary to prepare and complete their tax returns as soon as possible or within the agreed-upon date established during our meetings for us to receive their documents. Should you have any questions regarding the news we have been sharing with you after this novelvirus that is affecting people worldwide, please do not hesitate to contact us.