On Wednesday, the IRS officially announced an extension of the April 15th tax payment deadline for 90 days until July 15th, 2020. Today, Treasury Secretary Steven Mnuchin announced via Twitter that this extension will also apply to the actual filing of returns:
An official statement from the IRS has not been released yet, but we expect this decision to be confirmed soon. There are also bills in both the Senate and the House that will provide emergency economic relief, and these bills include a number of tax provisions. We are closely monitoring this situation and will provide updates when we have them.
As of right now, we are continuing to work through returns in the order they came in as we do every year. We do have a number of team members working remotely who are adapting to a new work environment and the challenges that presents. Our number one priority is everyone’s health and safety right now and the extension of the filing deadline will allow us to take our time working through returns.
Here are some additional items to consider based on what we know right now:
If you anticipate a large refund with your returns and are in a cash crunch because of the current economic situation, please let us know. The government is still processing refunds so we want to prioritize the returns for any clients who might need that cash in this difficult time.
If you anticipate owing taxes with your returns, we still recommend you provide us all tax information as soon as it becomes available. You do not need to file and pay taxes by April 15th, but we still want to get your returns prepared as soon as possible.
We are waiting on guidance from our tax software provider for any clients who have already filed returns with electronic payments set for April 15th. As of right now, we are unable to change the date of those payments. We will keep you posted as we learn more.
If you make quarterly estimated tax payments, your first quarter payment will NOT be due on April 15th. We don’t know yet if that payment will be due on July 15th or later. There is a proposal to delay all 2020 payments to October 15th, but we are waiting for further clarity from the IRS.
The extension of time to file appears to apply to all businesses and individuals, so we assume this means trusts as well.
We assume this extension will also apply to the April 15th deadline to make IRA contributions but we don’t have any confirmation of this yet.
Each individual state is also implementing their own changes. The AICPA has an excellent summary of what each state is doing here.
This is a rapidly changing situation and we will continue to monitor any changes that could impact you. We will also continue to work through your tax returns as best we can given the current situation.
If you have any questions on this, feel free to reach out to us anytime.
-Chris Benson, CPA, PFS