Important Tax Update
We want to keep you up to date on developments affecting your tax situation during the ongoing health crisis. Please remember that the situation is fluid and things may change rapidly.
Postponement of April 15 filing deadline:
IRS announced that the April 15 filing deadline will be pushed back to July 15 for all income tax returns. It is not necessary to file an extension. An additional extension of time to October 15 can be requested by July 15.
Postponement of tax payments:
The IRS has provided tax payment relief for any person with a federal income tax payment due April 15. The due date for making federal income tax payments usually due April 15, 2020, is postponed to July 15, 2020.
The due date is postponed only for federal income tax payments for 2019 normally due on April 15, 2020, and federal estimated income tax payments (including estimated payments on self-employment income) due on April 15, 2020, for the 2020 tax year.
The IRS has not provided a payment extension for the payment or deposit of any other type of federal tax (including payroll taxes and excise taxes).
The period beginning on April 15, 2020, and ending on July 15, 2020, will be disregarded in the calculation of any interest, penalty, or addition to tax for failure to pay the federal income taxes postponed. Interest, penalties, and additions to tax with respect to such postponed federal income tax payments will begin to accrue on July 16, 2020.
In addition, interest, penalties, and additions to tax will accrue, without any suspension or deferral, on the amount of any federal income tax payments in excess of the Applicable Postponed Payment Amount due but not paid by on April 15, 2020.
Taxpayers subject to penalties or additions to tax despite the relief granted may seek reasonable cause relief under Code Sec. 6651 for failure to timely pay tax or seek a penalty waiver under Code Sec. 6654 for failure by to pay estimated income tax, as applicable.
The IRS has confirmed that, as of now, the deadline for gift tax returns and payments will also be extended to July 15. In addition, the time for making IRA contributions that can be deducted on 2019 individual tax returns is extended to July 15, since that is the now considered the original due date for 2019 returns.
In addition, many states have sent out notices granting similar relief. New York State has announced that it will mirror the federal deadline extension to July 15.
Please contact your Gettry Marcus Advisor if you would like additional information.