24 Mar New July 15 deferred tax filing AND payment deadline – Why consider NOT waiting?
Recently, it was announced that the 1040 individual tax filing deadline was deferred from April 15 to July 15 this year due to COVID-1 The previous IRS announcement was only for tax payments that are due to be deferred to July 15.
Now, the July 15 deferred deadline includes BOTH the deadline to pay taxes owed AND the deadline to file your 1040 for 2019.
Delaying filing and paying taxes owed until 7/15 may not be a good option for you.
Why should you still file your taxes as soon as possible? Items to consider:
For those receiving refunds, you will want your tax refund as soon as possible. So, file ASAP to receive your refund sooner.
The IRS has not fully provided guidance yet on their internal process to keep track of this deadline change. Their electronic computer systems are already antiquated under ‘normal’ filing situations and deadlines. Their staff is overburdened. Therefore, we can likely expect IRS notices to be mailed, in error, for some of those that decide to file after 4/15. This is based on our long history dealing with abnormal IRS changes. However, we hope that this will not be the case. We are here all year and will help our clients with these notices if they occur. By filing before 4/15, this possibility of an IRS notice will be one less thing for our clients to have to worry about, especially since we can still meet the 4/15 deadline for most of our clients that are providing us with their tax information now.
If you pay quarterly estimated tax payments: The IRS also released guidance recently that the first quarter 2020 estimated tax payments for individuals (due 4/15) has been deferred. We think that if you can afford to pay those, you should anyway by 4/15. If there is a drop in estimated income in 2020, we can change these estimates downward. Just let us know. The second quarter estimated payment is due 6/15 — as always. So, the total tax due for 2020 is still due for 2020. Consider paying four and not three payments, as spreading out the payments for 2020, as you always have in the past, may help your cash flow. Providing us with your tax information now allows for us to provide tax planning well ahead of the estimated tax payment deadlines that are coming up in 2020.
We acknowledge (and so does the IRS) that during these times it may be the last thing on your mind — to file taxes. However, tax returns still need to be filed by the deadlines allowed — and the IRS will still assess penalties and interest if not. We are still working around the clock to prepare tax returns for individuals and businesses. This delay in the deadline from the IRS is intended to allow for taxpayers to not have to worry as much about the deadline of 4/15 — providing an extra 90 days to file. However, it does not remove the legal obligation to file.
If at all possible, consider providing our tax team with your tax information as soon as you can so that we can prepare your tax returns timely. If the reason arises that we need a bit more time to prepare your tax return, or you need to gather further information for us, this new 7/15 deadline will allow you more time to gather the additional information that is required to finalize your return. So, if possible, please send us your 1040 information sooner, rather than later.
Regardless of the deadline, do not wait until the last minute to provide us with your tax matters. We have virtual options to do so (see our options page here for more on that). Waiting can lead to more stress in an already difficult time. We want to be able to guide you in a confident and proactive manner — as always.
We wish you, your family and our community all the best in this difficult time. We are all in this together.