2020 tax season: everything you need to know about the delay of filing

In response to the pandemic coronavirus, the internal revenue Service (IRS) extended the deadline for filing tax returns and paying any taxes with April 15, the date was postponed to July 15, says GOBankingRates. If you plan to use a delay, here’s all you need to know.

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Individual applicants can request an additional extension of time

Individual applicants who fail to apply before the new deadline, still have the right to request further extensions. To extend until October 15, you will need to fill out a form 4868. You can submit the document through your tax preparer, tax software or through Free File on IRS.gov.

You do not need to request an extension until July 15

Tax 2019 deadline was automatically extended to July 15 for all individuals, trusts and corporations. New deadline is automatic — you do not need to file any extra forms or call the IRS.

Period July 15, applies only to Federal income taxes

A new important period for the payment of Federal income taxes — it does not apply to the personal income taxes that you may owe to your state. Time in different States vary, so be sure to check with the tax authority of your state correct term.

The new deadline gives you 3 additional months to use the money

If you owe the IRS money, you now have extra time to use these funds at their discretion.

“The additional three months will provide time to invest or use the money for other needs,” said mark Wieder, one of the leaders real estate group at accounting firm Anchin, Block & Anchin.

This can be especially useful for those without work

The possibility of higher taxes may be particularly useful for those who have lost jobs or faced reduced wages due to pandemic coronavirus.

“The postponement of tax filing and tax payment of 90 days can be a big help for many people, especially if you were fired or you have any financial problems,” said Miguel Horvath, CFP, MSF, consultant at Ameriprise private wealth in Miami.

This gives you extra time to figure out how to submit a Declaration in electronic form

“In today’s new world of social distance and virtual meetings some people who are not tech savvy, may need additional time to figure out how to send the information to its withholding agent in electronic format,” said Horvath.

In your best interest to still file a tax return before

“There is no reason to delay preparing your tax return, said Gary Duboff, Director, division of taxation and accounting at MBAF. If you need your tax refund, the sooner you submit, the better. If you have money, you can make your Declaration now and to pay your tax bill on 15 July, without interest, penalty or other sanctions. Anyway, this is a great time to focus, gather information and send it to your tax specialist.”

Tax refund in any case will be within 90 days of filing

The sooner you apply, the sooner you will get a refund, but the timing of the receipt is likely to remain the same.

“The IRS generally returns the money within 90 days of receipt of the tax return, said Wieder. — I assume this will not change: if you apply before July, you will receive a refund sooner.”

If circumstances have changed, the wait may mean a lesser amount of financial aid

Federal financial assistance in connection with the coronavirus that the US Treasury sends to all relevant taxpayers, based on your individual tax returns for the year 2019. If you have not filed a tax return for the year 2019, the payment will be based on your tax return for the year 2018.

“In most cases, this amount is likely to be the same as your income, registration status, and the household probably has not changed, said Duboff. — However, if your income is dramatically different, your filing status has changed or you have a new baby in 2019, the payment may be more or less than the basis of the Declaration of 2018. If you haven’t received your check, it’s not too late to file a tax return for the year 2019 and to receive adequate payment”.

However, if you have already received a check based on the tax Declaration in 2018, and in the end you owed a different amount, you will get the difference next year.

“If the final payment is different, will be reconciled in the form of a credit when filing the tax return for the year 2020,” he said Duboff.

The extension of the period includes your estimated tax payments for the 1st and 2nd quarters 2020

“Renewal is not just a later date for filing, but the deadline for payment, said Duboff. The most important is that the extension of the term also includes tax payments for the first and second quarter of 2020, which were to be paid on April 15 and June 15. Failure to meet these payments before July 15 will not entail any fee or penalty”.

The new deadline also applies to tax returns for the estate and gift taxes.

Was extended to other forms, and deadlines for tax payment

According to bill Smith, managing Director, National tax Agency CBIZ MHM, a deadline of July 15 is now applied to a number of forms.

“For example, the international forms such as forms 5471 and 3520, which are information of the Declaration, not the Declaration of the income tax act have also been expanded, he said. — Transactions of equivalent exchange must be completed within 180 days from the date of sale of exchange of real estate. Due to the fact that the coronavirus has closed all real estate transactions, people who engaged in these exchanges, did not know whether the extended term of 180 days, because it is not a tax return. Similarly, investment of capital gains in the Fund Qualified Opportunity Zone must occur within 180 days from the date of sale of the asset. The IRS has extended both up to July 15, along with many others.”

But some deadlines are not extended

According to The Wall Street Journal, the deadline of July 15 does not apply to excise duties and refunds — for example, a form 1099 — and some payroll taxes.

The deadline for IRA contributions is also extended

The IRS also extended the deadline for making contributions to a traditional IRA, Roth IRA, savings account of health and Archer MSA until July 15.

“It gives you another 90 days to find the money to contribute to your IRA for the year 2019, said Horvath. — This will not only help you save on taxes but also will help you to retire, and that’s a win in all respects”.

Checks will also be delayed

If you are afraid that you can check tax, you have three more months to bring their documents in order. The Wall Street Journal reported that the IRS generally will not commence new audits and suspend personal meetings with taxpayers who are under investigation, until July 15.

Suspended and other measures

In late March, the IRS implemented the initiative People First, to facilitate regulatory compliance. Changes include the suspension of payments on installment agreements from 1 April to 15 July and the suspension of arrest of property on the basis of liens and levies during the same time period.

The extension applies to penalties for early withdrawals

If you have used early withdrawals from retirement accounts in the year 2019, you now have until 15 July to pay any penalties.

Until 15 July you need to apply for a refund of unclaimed taxes from 2016 and later

Americans who have not filed tax returns in previous years, you can miss out on unclaimed tax refunds. Taxpayers usually have three years to claim the tax refund. For tax returns of 2016, the window closes on the 15th of July 2020.

You should not miss the deadline of July 15

Although the use of an additional 90 days is quite normal, Duboff is not recommended to apply before July 15, 2020.

“If you have the opportunity to complete the filing until July 15, you will be in a better position, he said. — Added three months will give tax authorities more time to process documents. For accountants and tax inspectors will be a lot of pressure, so they did their job, forcing them to work in a much shorter and faster pace than usual.”

If you miss the new deadline and does not submit an application for renewal, pay the fine

“We encourage clients to file tax returns on time — July 15 for individuals, or October 15 with extension of deadline, said Mike savage, CEO of 1-800Accountant. — Penalties for violations are quite significant.”

Even if you are unable to pay all its debts in a timely manner, you should still submit documents on time.

“There are repayment options such as installment plan,” said savage.

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