Due to the coronavirus pandemic, the due date for filing federal income tax returns and making tax payments has been postponed by the IRS from April 15, 2020, to July 15, 2020. No interest, penalties, or additions to tax will be incurred by taxpayers during this 90-day relief period.

The relief applies automatically to all taxpayers, and they do not need to file any additional forms to qualify for the relief. The relief applies to federal income tax payments (for taxable year 2019) and estimated tax payments (for taxable year 2020) due on April 15, 2020, including payments of tax on self-employment income. There is no limit on the amount of tax that can be deferred.

Note: As of the writing of this newsletter, the June 15 federal tax estimate is still due on June 15. 

It is important to note that most states have followed the federal rules on the due dates, but make sure to check with your state on their filing deadlines. 

What about IRA and Roth IRA contributions?

According to the IRS, contributions can be made to your IRA or Roth IRA, by the due date for filing your return for that year. Because the due date for filing Federal income tax returns has been postponed to July 15, the deadline for making contributions to your IRA for 2019 is also extended to July 15, 2020.

This also extends to contributions to Health Savings accounts and self-employed retirement accounts (Individual 401(k) plans and SEP IRAs). 

Need more time?

If you're not able to file your federal income tax return by the July due date, you can file for an extension by July 15.   The extension gives you until October 15 to file your federal income tax return. Filing for an extension in July does not provide any additional time to pay your tax. You have to estimate the amount of tax you will owe and pay this amount by the July filing due date.

Tax refunds

The IRS encourages taxpayers seeking a tax refund to file their tax return as soon as possible. Apparently, most tax refunds are still being issued within 21 days of the IRS receiving a tax return. And the fastest way to receive your refund is through direct deposit. 

As always, we will keep abreast of this rapidly changing landscape and we are here to answer questions.