These are certainly trying and uncertain times we live in. With the tornadoes in Middle Tennessee in March and now the COVID-19 concerns, the last few weeks have been extremely difficult for many families and businesses.
I expect as the next few weeks continue to progress, small businesses will need our support now more than ever before. I trust you will continue shop local, as these businesses are the backbone of our economy.
I wanted to share with you that taxpayers will get a three-month reprieve to file and pay the income taxes they owe for 2019. The due date will now be July 15th, 2020 for all individual and corporate income tax returns. Those located in Tennessee in Davidson, Wilson, and Putnam counties were already granted the same extension earlier this month due to the tornadoes. Now everyone will have until then to file and pay their 2019 taxes.
As part of its coronavirus response, the Treasury and IRS will give filers 90 days to file and pay income taxes due on up to $1 million in tax owed. Corporate filers would get the same length of time to file and pay amounts due on up to $10 million in taxes owed. During that three-month deferral period, taxpayers won’t be subject to interest and penalties.
Initially the IRS released Notice 2020-17 regarding the relief for taxpayers affected by COVID-19. You can read the full Notice 2020-17 here: https://www.irs.gov/pub/irs-drop/n-20-17.pdf
Often when the IRS offers relief, they give relief for filing as well as payments. In an unusual manner, the IRS originally did not extend the filing deadline in this notice, only the payment deadline.
The American Institute of CPAs and other state societies appealed to Treasury Secretary Steven Mnuchin about the hardship this creates for taxpayers and tax preparers like myself. Cities across the country are having to shut businesses down because of the coronavirus pandemic, and it is impossible for every taxpayer and their tax adviser to prepare returns in this environment. Nearly 60% of all taxpayers turn to a tax practitioner to prepare and file their tax returns, and individual and business tax filing deadlines are fast approaching. The CPA profession wants to help the system function well. To do that, we needed payment and filing relief together. Then early Friday, Mr. Mnuchin put out this tweet:
Later the IRS issued Notice 2020-18 https://www.irs.gov/pub/irs-drop/n-20-18.pdf which restates and expands upon the relief provided in Notice 2020-17.
For an Affected Taxpayer, the due date for filing Federal income tax returns and making Federal income tax payments due April 15, 2020, is automatically postponed to July 15, 2020. Affected Taxpayers do not have to file Forms 4868 or 7004. There is no limitation on the amount of the payment that may be postponed.
The relief provided in this section III is available solely with respect to Federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year, and Federal estimated income tax payments (including payments of 3 tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 taxable year.
Please remember to check your state and local deadlines as they may or may not change as a result of COVID-19.
If you need further assistance, or have any questions or concerns, don’t hesitate to call or email me. Until then stay healthy!