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The Coronavirus COVID 19 has pushed the world into a recession, with stoppage of work and productivity taking a hit, across all sectors. Since March 2020, the United States witnessed a sudden increase in COVID 19 cases, is now the top three nations with most active number of COVID 19 cases.
In a period of uncertainty, there is ambiguity about tax payments for US citizens. The good news is that federal tax payments have been deferred. There is a three-month extension, till July 15 to pay federal taxes, without limitations on amounts owed and encompasses individuals, businesses, the self-employed, corporations and non-corporations. There is no penalty for making payments before July 15.
How do I go about getting the extension?
The IRS states that one doesn’t have to meet any criteria to get the extension, it is available for everyone. You do not have to fill any form or call the IRS.
If you do need an extension beyond the stipulated date of July 15, then you have to file FORM 4868. With this form, you will have to pay estimated taxes by July 15 to steer clear of penalties. However, you have to file tax returns before October 15.
Can I file my federal tax returns before April 15?
Most certainly. According to the information given by the Treasury Secretary, you can defer payments till July, but you can file your tax returns before April 15. The sooner you file your tax returns, the faster is the chance of getting tax refunds, if any. The IRS processes tax returns even now, but the Tax Assistance Centers are closed.
Can a business also benefit from the July 15 extension?
Yes, businesses can also pay their taxes without worrying about penalties and interest, till July 15. The IRS states that businesses have to file Form 7004 to get a deferral post July 15, just like individuals, businesses have to pay estimated taxes before July 15 to avoid penalties, and file returns before October 15.
How do I get up-to-date information on Federal Tax updates with respect to coronavirus?
You can go to the IRS website, there is a section dedicated to information with regards to coronavirus →. https://www.irs.gov/coronavirus
Is there information on filing state tax returns?
Many states have stated that they are willing to postpone deadlines for people and businesses affected by coronavirus. States like Florida, Oregon, Indiana, Connecticut, North Carolina and South Carolina are ready to forego penalties if tax payments are delayed due to the ongoing coronavirus problem. California has allowed its residents to delay payment of taxes until June 15, if they cannot make it before April 15. Do check with your official state government website for more information on state tax returns, applicable to your state.