In response to the coronavirus crisis, the IRS announced several changes to the tax filing season this year. For those of you who have not already filed your 2019 tax returns, you now have more time to prepare and pay. In fact, for those who owe money to the IRS for federal income tax for 2019, this may be the first time you can get a penalty and interest-free loan from the IRS! However, you may still have questions which we hope to answer for you here.
What is the new filing date for federal income taxes?
The federal income tax filing deadline for your 2019 tax return and related taxes (up to $1,000,000) is now July 15 as opposed to the regular April 15 deadline we are all familiar with. You do not need to file for an extension unless you plan to file later than the new July 15 deadline. Any applicable interest and penalties will not begin to accrue until July 16.
If you expect a refund, obviously the sooner you file, the sooner you will receive your refund, so don’t wait until July 15.
If my tax return is not done by July 15, can I still file an extension, and what is the extension deadline?
All your tax is due by July 15, the new deadline for filing your federal income tax return. Any underpayment of your tax liability will incur a penalty and begin accruing interest on July 16. However, you may file for an extension by July 15 to allow you to file your tax return on or before October 15, 2020.
When are my first and second quarter estimated tax payments for 2020 due?
For those subject to quarterly estimated tax payments (you know who you are), first quarter estimated tax payments, regularly due April 15, are now due July 15. The IRS, however, as of this writing has not yet addressed second quarter estimated tax payments. Therefore, oddly enough, as it stands now the second quarter estimated tax payments are due before the first quarter – for now.
When is my 2019 IRA contribution due?
You now have until July 15 (or the actual filing of your 2109 income tax return) to make your 2019 IRA contribution.
Has the deadline for my state income taxes been extended as well?
Many states are conforming to the IRS deadline, however, others have different deadlines and guidelines. California deadlines are as follows:
Individual tax returns and any tax return payments normally due on April 15 are now due July 15.
Quarterly estimated tax payments normally due on April 15 are now due July 15.
The present due date of July 15 may be pushed back further if the IRS grants a further extension.
When filing your California state tax return, it’s important to note that according to the Franchise Tax Board web site, “Taxpayers claiming the special COVID-19 relief should write the name of the state of emergency (for example, COVID-19) in black ink at the top of the tax return to alert FTB of the special extension period. If taxpayers are e-filing, they should follow the software instructions to enter disaster information.”
Does the timing of filing my income tax return have any impact on the CARES Act stimulus package?
As noted in last week’s article, eligible taxpayers will receive checks up to $1,200 per individual or $2,400 for married filing joint taxpayers, plus an addition $500 for each qualifying child. Payments will be based on information from you most recent income tax return, 2019 or 2018 if you have not already filed. However, if you are eligible for larger payments based on your current 2020 situation, you will receive it in the form of a rebate on your 2020 income tax return.
For now, if your 2019 adjusted gross income (AGI) is lower than your 2018 income and puts you below the thresholds ($75,000 for individuals and $150,000 for married couples filing jointly) thereby making you eligible for stimulus checks, you have a great incentive for getting that filed quickly, if you have not already done so. Whenever the government issues the stimulus checks, it will be based on the most recent tax return they have on file – 2019 or 2018.