Because of the ongoing financial turmoil, the IRS is cutting some slack to a great many individuals and businesses. They now have until July 15 to pay any federal income taxes they owe. The delay is available to individuals who owe $1 million or less and corporations that owe $10 million or less. The IRS will not charge interest or penalties for this delay.
This could be an enormous boon to those who owe money. It’s never easy finding the cash to write the government a check, but it’s especially difficult now, as the coronavirus has curtailed so many activities: Many businesses and employees are seeing a drastic drop in income, and decimated stock portfolios may force some investors to sell at a loss to cover tax bills. Hopefully, in three months, taxpayers will be in a better position to pay.
However, this is only a delay in payment, not filing. Taxpayers must still meet the April 15 filing deadline unless they take advantage of the already-existing system for requesting a delay in filing. For those who have already filed and are expecting a refund, nothing has changed; this does not mean they will have to wait any additional time for their refunds.
This delay only affects federal returns, not state. However, some states are offering similar relief. The American Institute of CPAs has created a list of what each state is doing. Note that this is a fast-moving story, so even if your state has nothing planned as of today, that may change by tomorrow.
Finally, as of March 18, the IRS postponement is just an oral promise from the Treasury Department: The IRS has not published any official guidance or even acknowledgment, so there will likely be further details and possible restrictions. However, the original April 15 date is still weeks in the future, so there’s some leeway. We are closely monitoring the situation.
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