Time Is Drawing Near!
Time Is Drawing Near!
As part of the federal government’s tax relief measures during the COVID-19 pandemic, the IRS extended key deadlines. The new deadline for filing the 2019 tax year and for making 2020 estimated tax payments is July 15, 2020. If your 2019 personal return is still awaiting completion, you may have significant retroactive tax-planning flexibility.
The IRS pushed back deadlines for individual taxpayers from April 15 to July 15, for the following actions:
- Paying any remaining 2019 personal federal income tax bill.
- Filing your 2019 personal federal income tax return (Form 1040).
- Taking several actions that can affect what you’ll owe with that return, such as contributing to a tax-deferred traditional IRA or a health savings account (HSA) for 2019.
In other words, you can defer any personal federal income tax liability (including any self-employment tax bill) that’s still owed for your 2019 tax year until July 15.
You can also postpone filing your 2019 personal federal income tax return until July 15.
These are automatic relief provisions. You don’t have to file anything with the IRS to take advantage, and you won’t owe any interest or penalty if you do.
However, if you don’t pay up by July 15, the federal government will start charging interest on the shortfall at a current annual rate of 5%. This rate is subject to change each quarter. You’ll also be charged a failure-to-pay penalty of 0.5% per month on the shortfall (up to a cumulative 25% of the shortfall). The interest charge and penalty go away as soon as you pay up.
So have you put off doing the dreaded deed of gathering all your information until now? We are here to help! Reach out to Grace at email@example.com and she will get you scheduled.
PS – As this was written, the normal procedure must be followed to further extend the filing deadline for your 2019 personal federal income tax return to October 15. We can handle that by filing IRS Form 4868 to request an automatic extension to that date. This must be done by no later than July 15 so be sure to reach out to us today!