Amidst a global shut down and economic meltdown, up to this point in time US taxes have been unaffected. At this time, the April 15 filing deadline remains in effect.
However, yesterday the Treasury Department and the IRS have announced an extension for the payment of federal income taxes. The payment extension gives individual and corporate taxpayers 90 days to remit payments due with their 2019 income tax returns subject to certain limitations.
We are still waiting for the Treasury to issue written guidance addressing this extension, additional details or provisions may be included. We will keep you abreast of those developments as they unfold.
This extension to pay applies to both individual and corporations with payments due April 15. Included in the relief provisions:
- Individuals can defer up to $1 million in taxes due.
- Corporations can defer up to $10 million in taxes due.
- Delayed payment of estimated quarterly tax payments paid by self-employed workers and businesses is also being considered. The first quarter estimated tax payment for individuals is normally due April 15.
It is critical to note that these payment deadlines apply to federal returns; they do not automatically apply to your state filing and payment requirements. Please visit the AICPA state tax-filing extension matrix to see if your state has changed its filing and payment requirements.
At this point, our advice is to prepare your return as usual, if possible. If you owe money, file extensions as a precautionary measure then follow the extend payment options outlined above. We would further advise suspending 2020 quarterly estimates to provide necessary cash flow as we rapidly move into an economic slowdown. You may still owe the tax with penalties. However, based on the uncertainty of economic conditions and the nominal amount of these penalties, preservation of capital is paramount.
We are continuing to monitor the rapidly evolving tax and financial conditions. We will keep you abreast of these important changes as they unfold. Please do not hesitate to contact us for assistance in navigating these changes and declining market conditions.
The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. Tax information, if any, contained in this communication was not intended or written to be used by any person for the purpose of avoiding penalties, nor should such information be construed as an opinion upon which any person may rely. The intended recipients of this communication and any attachments are not subject to any limitation on the disclosure of the tax treatment or tax structure of any transaction or matter that is the subject of this communication and any attachments.