Tax Filing Deadline And Extensions To Keep In Mind
This March (2020) we saw something unprecedented happen when the President of the United States delayed taxes. When the COVID-9 crisis began to ramp up, the federal government decided to move the tax filing deadline. For the first time since the mid-1950s, Americans can actually wait to file their federal taxes until the dead of summer. Keep reading to learn everything you need to know about filing your 2019 taxes.
What Is The New Tax Filing Deadline?
As of March 11, 2020, the new federal income tax deadline has moved from April 15 to July 15. If you're someone who is busy managing your freelance finances, this is fantastic news. You most likely were preparing to pay, and now you have an additional 90 days to come up with your tax payment. You might also enjoy reading tips on how to simplify the office process.
Is The IRS Closed?
The IRS has not shut down, per se. Rather, though, it is following the guidelines set out by the CDC in distancing their workers. Since the IRS wants to adhere to social distancing, they have suspended some services. You are going to have a difficult time finding a voice on the other end of the phone if you attempt to call the IRS.
There are people in the building, but the IRS has limited or completely shut down their live assistant services in some areas. Additionally, the IRS has suspended or limited their workers who process paper tax returns. They are now in what the IRS calls a "mission-critical" status. This means their workers are working only on the most critical elements.
The Coronavirus epidemic basically hit the federal government at the wrong time. Had the virus begun its spread in September, the IRS would not be affected in the same way. However, the need to keep their employees safe and healthy has led to the "mission-critical" status that affects taxpayers as well. The federal government and IRS have assured the public, that their limited workers will not affect their ability to process and deliver urgent checks from the most recent stimulus bill the federal government passed. Additionally, those who are looking for help filing their taxes will have to wait. The IRS has closed all Taxpayer Assistance Centers temporarily along with their volunteer tax preparation sites.
When Are Corporate Taxes Due?
While the federal government changed the date for federal income tax filing, they did NOT extend corporate tax due date. You should have filed your corporate taxes by March 16, 2020. You had the option of asking for a six-month extension prior to March 16, as usual. If you were overrun with all of the pandemic happenings at that time, you can always appeal to the IRS.
Contact them before they contact you through. The IRS may look kindly on you and not penalize you as harshly. You could even avoid an audit if you come to them, hat in hand so to speak, and tell them your situation.
Is There A State Tax Extension?
Forty-one states in the United States collect some kind of state income tax. These states have all followed suit to a degree and extended their deadlines. If you live and work in Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming, you don't need to worry at all about state income tax. Your state does not collect them!
If you live in New Hampshire and Tennessee, you're used to paying taxes on interest and dividends. Tennessee has extended its tax due date to July 15, like the federal government. With a few exceptions, most of the other states in the country have moved their state income tax due date to July 15 as well. Here are the exceptions:
- Colorado has a filing date of October 15 and a payment date of July 15.
- Hawaii has a filing and payment date of July 20.
- Iowa extended its filing and payment date to July 21.
- Mississippi residents have until May 15 to file and pay their state income taxes.
- Virginia residents must file by May 1 but have until June 1 to pay.
How Long Are Tax Extensions?
The length of the tax extension depends on the type of tax you're talking about. The tax extension is typically around 60 days for state income tax. It is a hard 90-day extension for federal taxes. Corporate taxes received no extension. When the coronavirus began to hit residents en masse and the president stepped in to give guidelines, the federal government quickly realized that they needed to do something.
The IRS would not be able to function safely, and if individuals began to lose massive amounts of income due to lost business or jobs, they would not be able to pay their taxes. These tax extensions exist to give business owners a chance to get back on their feet so they can pay their taxes. It also buys them some time so they can apply for a small business loan or receive a stimulus check that can help them out in the meantime.
The last thing a business owner needs to worry about now is how to pay their taxes. So the extension buys them some time to stay healthy and to build their businesses back up.
The Hurry & Wait Theory
The federal government has responded to the current COVID-19 crisis with the idea of hurrying up by passing legislation and policies and then waiting for this crisis to pass. Moving the tax filing deadline ninety days is a great example of this philosophy. The government made a fast decision, and now they're waiting for the virus to run its course so life can return to normal.
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