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Important Tax Updates During Covid-19
As the deadline looms threateningly on the horizon, taxpayers up and down the country are in the middle of preparing their taxes. However, with the current pandemic showing no signs of retreating yet, and a huge percentage of the population either in isolation or preparing to go into quarantine, many are concerned about how they will get their taxes done in time, if at all.
Here are a few of the ways in which Covid-19 might impact upon the filing of taxes:
An extension to the deadline:
President Trump announced that due to the severity of the current pandemic, he would be extending the filing deadline from April 15th for all those who may have been affected by the virus. In another announcement, Trump also declared that affected taxpayers would be able to defer paying their taxes until the following months deadline.
The federal tax filing deadline has been extended until July 15th of this year
The federal tax payments deadline and 2020 first quarter estimated tax deadline has been extended until July 15th of this year
The deadline for making contributions to IRA’s for the previous year has been extended until July 15th of this year
Tax deadlines throughout most states has been shifted to the 15th July this year in line with the federal tax deadline
Updates for the filing of extensions:
If you’re looking to file a tax extension due to having contracted the virus, the IRS will almost certainly require you to provide proof to that effect. Additionally, the President didn’t provide specific information related to who would qualify for a filing extension, and the duration of the extension. Some states have extended their tax filing deadlines for those who have been unduly affected by the virus, and the IRS website will have more details. Always get your information from a reliable, reputable source, and many tax professionals will also be able to guide you during these difficult times.
Covid-19 and stimulus package updates:
Signed into law on the 27th March, the CARES Act provides additional funds for individuals, join taxpayers and qualifying children:
Stimulus checks are up to $1,200 for individuals, $2,400 for those jointly paying taxes, and a further $500 for children who qualify
The amount given will be based entirely upon information given from your most recent tax filing, and will be from either 2019 or the previous year if you haven’t yet filed this season
Tax professionals are strongly urging the public to file their 2019 returns now, and if you’re expecting to receive a refund, choose to receive it via direct deposit so that the IRS have your most recent information
What if you haven’t contracted the virus?
Tax professionals are advising all taxpayers to file before the deadline and pay off any balance they may have to avoid accruing penalties and/or interest. If you haven’t contracted the virus, it’s business as usual, and there will be no concessions for those who file late. Stay abreast of any further changes to the tax system by keeping in touch with your trusted tax professional, or by routinely checking the IRS website.