What You Should Know about This Year's New Tax Deadline
At the peak of the COVID-19 pandemic, taxes were probably the very last thing on your mind. Many Americans were trying to adapt to working from home, or were losing their jobs altogether. Small-business owners were fighting to keep their business operational even as they had to close their doors, and citizens across the country were struggling more than ever to make ends meet. In addition to providing stimulus checks to ease financial burdens, the federal government also elected to extend their tax deadline to July 15th this year. That date is right around the corner, so here’s what you need to know about this new tax deadline.
Only for 2020
First and foremost, it’s important to be aware that this is not a permanent change. This is a one-time extension of the federal tax deadline intended to ease taxpayers’ financial burdens and allow citizens to focus on the crisis at hand. Please make sure that you are ready to file your return and pay any taxes due on April 15th next year.
If you’re worried that your tax deadline wasn’t extended because you never filed for that extension, don’t be. This extension was given to all taxpayers automatically, so your taxes are not yet due—but will be very soon!
For Individuals and Businesses
While individuals and businesses typically have different tax deadlines, 2020 is obviously a very different year than most. The new tax deadline of July 15th applies to individuals, trusts, and corporations alike. So, if you own a business, you don’t have to worry about an earlier tax deadline like you usually do; you can file your individual and business tax returns at the same time.
No Interest or Penalties
Initially, the federal government only extended the filing date for federal taxes, while taxpayers were still required to make an estimated payment on their taxes by April 15th. However, this was quickly changed, and the payment deadline was also pushed back to July 15th. This means that you will not accrue any interest or penalties on any taxes you might owe until the new deadline has passed.
Retirement Contributions Still Deductible
Under normal circumstances, you would have been able to contribute to your IRA or other retirement plan until April 15, 2020, while still deducting it on your 2019 taxes. This deadline for deductible contributions was also pushed back to mid-July, along with the tax deadline. So, if you’re looking to add a few more deductions to your 2019 tax returns and haven’t yet maxed out your IRA contributions, there’s still time to do so before you file.
You Can Still Extend
Further extensions on your taxes are still available to both businesses and individuals. Typically, filing an extension would push out your tax filing deadline by six months. However, the extension deadlines have not changed. This means that if you file an extension for your business’s taxes, you will only get an additional two months to file, as the extension deadline for business returns currently remains September 15th. For individuals, the extension deadline remains October 15th, so you would get an additional three months to file.
It is also important to note that, unlike the automatic extension granted in the wake of COVID-19, filing for a further extension will only extend your filing due date. You will still be expected to pay any taxes you owe by July 15th if you hope to avoid fees and interest.
Doesn’t Apply to State Returns
Finally, please note that the extended deadline given by the federal government only applies to your federal tax return. State tax deadlines can vary and may be different from the federal tax deadline. However, many state tax agencies have offered the same extension to its citizens. If you’re uncertain about what your state’s tax deadline is, it’s extremely important to find out as soon as possible. You can find your state’s tax agency here. If you’ve already missed your state tax deadline, it’s important to file as soon as you possibly can to minimize penalties and interest on your overdue taxes.
If you need assistance preparing for the new tax deadline, please reach out to us today. We know these have been difficult times, and we want to make sure that your tax return isn’t another burden on your shoulders. We’re here to help make filing your return or requesting an extension easy, so contact one of our tax professionals today to get expert help on your individual or business tax return.