Dear Valued Clients and Friends,
As many of you are already aware, the Treasury Secretary announced this morning that the Federal government has extended the income tax filing and payment deadline for individual and some corporate returns for 90 days beyond the normal tax deadline of April 15th.
The new filing and payment deadline is July 15, 2020.
Here is a brief explanation of the official statement:
1) The new filing and payment deadline is July 15th, 2020.
As of Friday, March 20, 2020, there is an extension of the April 15th individual (and some corporate) tax filing and payment deadline. There currently is not updated information on any potential changes to the October 15 extension deadline. Those taxpayers unable to file by July 15th, should request an extension of time to file on IRS Form 4868, although we do not know what the tax extension timeline will look like at this point.
2) All Federal income tax payments may be deferred until July 15th, 2020.
The official guidance indicates this includes both 2019 balances due as well as 1st quarter 2020 estimated tax payments. However, if you have the funds available to make your final 2019 tax payments by April 15th, or shortly thereafter, then we recommend you do so as interest rates are currently very low and these funds would likely not be earning much otherwise.
In addition, if your 1st quarter 2020 tax payments have been calculated and you have the funds available to make these payments by April 15th, or shortly thereafter, we recommend you do so for the same reason. Otherwise, you technically are not required to make these federal payments until July 15th.
3) This change applies only to federal income tax payments. It does NOT apply to state income tax payments due with 2019 income tax returns. Each state will have to decide independently if it will provide taxpayers any additional time to make income tax payments due. Minnesota has not conformed.
4) IMPORTANT NOTE FOR TAXPAYERS EXPECTING A TAX REFUND: According to the Washington Post “The Treasury Department … had been reluctant to postpone the deadline for filing as well, in part because doing so may result in fewer Americans getting their tax refunds at a weak moment for the American economy.” As such, we highly recommend that our clients who anticipate receiving a refund on their 2019 federal tax returns should file their returns as soon as possible to avoid potential delays in receiving their refund.
Your tax professionals at HW & Associates will continue to monitor the announcements from the federal and state authorities. In the meantime, we encourage you to continue to gather any necessary tax documents and move forward with your income tax preparation. Remember, even if you file your tax returns prior to the new deadline, you are not required to make any payments until the new July 15, 2020 deadline. If there are any additional developments, we will update in a follow-up communication.
Please don’t hesitate to email your HW & Associates tax professional with any questions.
Very Best Regards from your HW & Associates Partners,
Todd Hysjulien, CPA
Brock Welch, CPA
Jude Anheluk, CPA
Katherine Gatchell, CPA