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IRS delays 2019 tax payments but not filings.

Andrew Silver
On March 20, 2020, the IRS announced a federal extension on tax filing, pushing the due date from April 15 to July 15 due to the impact of the coronavirus pandemic.

What is covered in this announcement?

  • Individual filers will have 90 days to pay income taxes due up to $1 million in taxes owed
  • Corporate filers will have 90 days to pay amounts due up to $10 million in taxes owed
  • During the deferral period, taxpayers won’t be subject to interest and penalties

 

What isn’t covered by the deferment?

  • Taxpayers still need to file their tax returns by April 15 unless they apply for an extension
  • State tax payments are subject to deadlines at the state level. This resource from AICPA provides individual state tax developments.

Stimulus Bill and 2019 Tax Return FAQs

Q: Why did the government make this move?
A: The delay is intended to keep $300 billion at play in the economy during this uncertain
time.

Q: What does this mean for me?
A: Americans expecting a refund are encouraged to file promptly to receive their refund as
soon as possible. Reasons to take advantage of the extended deadline include:

 

  • You will owe money and may need cash flow in the short-term to cover
    unanticipated expenses.
  • Your life has been significantly disrupted by the pandemic and you have not had time or mental bandwidth to prepare your return.
  • In light of recent circumstances, you now prefer to engage a tax professional.

Q: If I take advantage of the extension, will I pay a price?
A: No, you will not be subject to interest or penalty if you delay your federal filing through
July 15.

Q: I’ve heard stimulus checks may be coming. Do I need to get my return filed to receive one?
A: No, stimulus checks will be based on your 2018 tax return that was filed in 2019.

Q: Does the extension apply to federal and state taxes?
A: No, individual states are not mandated to extend filing deadlines. You can see the latest tax return relief efforts for your state in this resource from the AICPA.

Q: I usually file my own tax return. Do I need to hire a professional this year?
A: Some reasons you might want professional help this year:

  • If you anticipate a reduced income in 2020, a CPA can help you look forward to estimated tax payments.
  • You haven’t kept up on the latest changes to tax law; CPAs are acutely focused on the nuances of tax code and how to interpret changes to help clients.
  • Your time is better spent elsewhere, like caring for loved ones or making work adjustments.
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