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Archive for March, 2020

IRS Tries To Explain the New July 15 Tax Day Details

Posted by taxguru on March 25, 2020

As is almost always the case with the wonderful tax systems in this country, even the simplest of concepts is more complicated and twisted than necessary.

Moving the 2020 Tax Day for 2019 tax returns to July 15 has already created a lot of confusion among taxpayers and tax practitioners.  To remedy, or add to, the confusion, IRS has already published 24 FAQs related to this new date.

Filing and Payment Deadlines Questions and Answers

The University of Illinois TaxSchool has posted this video explanation of the IRS FAQs.

As the presenter says, these FAQs are fluid and will almost certainly be changed before July 15 comes around and as a result of items in the massive stimulus bill that is working its way through Congress.

One of the craziest answers from IRS is Q16 regarding the due date of the second estimated tax payment for 2020.

A16. No, second quarter 2020 estimated income tax payments are still due on June 15, 2020. First quarter 2020 estimated income tax payments are postponed from April 15 to July 15, 2020.

The second quarterly payment is due a month before the first payment.  Does this make sense to anybody?  In the Bizarro world of Washington DC, it probably does.

Posted in IRS, TaxDay | Comments Off on IRS Tries To Explain the New July 15 Tax Day Details

State Tax Filing Dates

Posted by taxguru on March 24, 2020

While most state tax agencies do their best to mirror IRS due dates, that isn’t always the case, for various reasons  During this time of unprecedented uncertainty, it is even more confusing than ever.

The AICPA has assembled a 123 page pdf chart with the State rules as of now on the special section of their website dealing with this virus panic.  It is supposed to be updated daily, which will most likely be necessary as the end date of this mess continues to be pushed outwards.

Luckily, this chart and the website are available to anyone, not just AICPA members.

I learned about this from a comment on the very informative TaxBook Message Board.

[Updates 3/26/2020] – The AICPA chart of state details is being updated and expanded daily, with the same URL.  Today’s version is up to 169 pages.

As of today, the AICPA has not yet picked up the status of Arkansas tax deadlines, so I checked on the DFA’s website and I was glad to see that they have matched the IRS’s July 15 due date.  Since we prepare a lot of Arkansas returns, this will make things so much easier than having to deal with two separate filing deadlines.

Posted in AICPA, StateTaxes | Comments Off on State Tax Filing Dates

Tax Day is now July 15

Posted by taxguru on March 20, 2020

TaxDay2020

 

Finally, a bit more common sense.  Treasury Secretary Mnuchin has finally expanded the filing deadline for 2019 tax returns to July 15.  IRS has yet to issue a press release on the specifics of this new due date and what it will mean in what has now become real life in this country. This will remove at least one issue to worry about during the current shut-down of the country. 

From Fox News: Tax Day moving to July 15 amid coronavirus crisis, Mnuchin announces

States that mirror IRS due dates have or will also be setting their 2019 tax return deadlines as July 15.

California’s Franchise Tax Board has extended its earlier June 15 deadline to match the new IRS due date of July 15.

State Postpones Tax Deadlines Until July 15 Due to the COVID-19 Pandemic

 

[Update 3/21/2020] – IRS has published a press release explaining the new filing deadline for 2019 tax returns and extensions.

Tax Day now July 15: Treasury, IRS extend filing deadline and federal tax payments regardless of amount owed

If you can’t get your tax return done by July 15, taxpayers will need to file actual extensions by that date.

Posted in TaxDay | Comments Off on Tax Day is now July 15

IRS Filing Deadline Has Not Been Extended

Posted by taxguru on March 18, 2020

As is all too common, there is a lot of misinformation being reported by the media regarding the comments by the Treasury Secretary, Steven Mnuchin.  This has already led to widespread confusion among clients and the public at large.

For the past week, I was fully expecting to be able to write a headline that Tax Day was extended to July 15, which is what was widely speculated by the AICPA and other tax pros.

However, yesterday’s comments by Mnuchin were not as simple as giving everyone an additional 90 days (July 14) to file their 2019 income tax returns, or extensions.  What was actually announced was a 90 day grace period for paying taxes due for 2019, from the normal April 15 deadline to July 14, for up to one million dollars of taxes for individuals.  Tax returns or extensions still need to be submitted to IRS by April 15.

This interest free payment extension doesn’t give the level of stress reduction that was advertised.  Preparing tax returns and extensions is still a hassle that is added to the current extreme pressures from all of the closings, layoffs and cancelations around the country.  Idiotic is the word that comes to mind.

I am hopeful that there will be a great deal of push-back to this ridiculous plan and our rulers in DC do the right thing before April 15 and just set the filing date for 2019  tax returns and extensions as July 15. 

Posted in extensions, IRS, TaxDay | Comments Off on IRS Filing Deadline Has Not Been Extended

Virus Extends Filing Deadlines

Posted by taxguru on March 13, 2020

For the past several days, there has been a lot of speculation that all of the disruption surrounding the nationwide panic over the Wuhan Virus would motivate IRS to officially extend the upcoming filing due dates for 2019 income tax returns; March 16 for 1120S (S-corps) and 1065s (LLC & partnerships) and April 15 for personal (1040), trusts (1041) and Gift Tax (709) returns.  With today’s declaration by the President of a National Emergency, that should be a certainty.  However, no official announcement has yet been made by IRS on their news page.

Normally in situations of large disasters and emergencies, IRS is the first to issue such filing extensions so that affected people can focus on dealing with their more pressing problems.  The State tax agencies then usually follow suit with their own announcements of filing extensions.  Some States, such as California, have a policy of automatically complying with any IRS sanctioned extension of filing deadlines.  In the current situation, the Calif Franchise Tax Board (FTB) has beaten IRS to the punch and has issued its own press release giving a new due date of June 15 for all tax returns that are due March 16 and April 15.  

This is different from a normal extension that taxpayers file, because that kind is only for requesting an extension of time to file the tax returns.  It is not an extension of time for paying the taxes owed.  Penalties and interest are assessed on late payments of taxes, while the normal extension avoids the much more expensive late filing penalties.  This new emergency related extension allows all Calif. taxes for 2019 to be paid up until June 15 without any additional charges for penalties or interest. 

Whether this June 15 date will stick as the due date will obviously depend on how long it takes for the panic in the country to subside and things to get back to normal.  If the virus scare stretches out for months and months. there is a possibility that the June 15 due date will itself be extended.

I intend to add to this post as news comes out, including the anticipated IRS announcement, as well as any by other States.

This is definitely going to be another very strange Tax Season.

[Update 3/14/2020] – Still no official announcement from IRS.  The U.S. Tax Court has announced that it has cancelled all of its March and April trials, which will really back things up for them.

[Updates 3/15/2020] – Still no official announcement from IRS. I’ve seen some mentions that any delay in deadlines requires an act of Congress, which makes no sense.  For the past several years, whenever there has been a presidentially declared disaster or emergency, such as from hurricanes and tornadoes, IRS has been pretty quick to announce official extensions of time to file returns for those in the affected areas, without any congressional action. On March 6, IRS announced an extended filing deadline of July 15 for those in the vicinity of the Nashville Tennessee tornadoes. This current virus panic is the same kind of thing, although on a much larger geographic scale, the entire country.

Some free tax assistance services, such as AARP’s Tax-Aide, have announced they have shut down due to this current health scare.  Seeing as how the affects of this virus are supposed to be much more dangerous for us older folks, that does seem to be a very prudent move.  As I have had to constantly remind clients, whenever it is necessary to prioritize between tax and health matters, health should always be first in line, with or without any official IRS permission.

Posted in Calif, extensions, IRS, TaxDay, TaxSeason | Comments Off on Virus Extends Filing Deadlines