IRS Announces Three-Month Extension for 2019 Tax Filing and Payments

Taxpayers have until July 15 to file and pay taxes

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The Internal Revenue Service has delayed federal tax day to July 15, 2020, in response to the coronavirus pandemic. The three-month filing extension for 2019 returns applies to all taxpayers, including individuals and businesses.

Any federal income tax payments that would have been due between April and July can also be deferred until July 15—without penalties and interest.

The extension is automatic, and taxpayers don’t need to do anything to qualify. However, the IRS is encouraging tax filers who are owed refunds to still file as early as possible. Most refunds are being processed within 21 days.

The outbreak of the COVID-19 virus has shut down much of the U.S., causing widespread disruption in the economy and financial markets. The tax day delay is one of many government relief measures, including expanded unemployment insurance, loans and tax credits for small businesses, and stimulus checks for most Americans.

If you haven't filed your 2019 tax return, you will still receive a stimulus check under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. In the absence of a 2019 return, the IRS will use your 2018 return to calculate the payment. (You can check the status of your payment here.) And for non-filers, the IRS has launched this online registration tool.

Does the Amount Owed Matter?

You can postpone paying taxes on your federal income tax return regardless of the amount owed. (Previously the IRS had specified maximum amounts, but those no longer apply.) This includes any small business and self-employment taxes you pay through personal tax returns. It also applies to any quarterly estimated taxes for 2020 that would be due between April 1 and July 15.

Filing for an Extension Beyond July 15, 2020

If you need more time beyond the July 15 deadline, you can file for an extension. Businesses must file Form 7004, and individuals must file Form 4868.

Here's how you can file an extension electronically without making a payment for your 2019 taxes:

Normally, the filing extension gives you an extra six months from the April 15 due date—until Oct. 15. The Oct. 15 date remains the deadline if you request an extension by July 15. And, just as you would with an extension in any year, if you estimate that you will owe money, you should pay that amount by July 15 to avoid any interest or penalties.

Extending your tax return filing doesn't include extending the payment date. The due date for 2019 tax payments is July 15, 2020.

How Will This Affect Small Business Owners? 

Many small business owners pay their business taxes through their personal tax returns (Form 1040 or 1040-SR). Those are normally due April 15 and now the deadline is July 15. Small businesses included in this tax relief measure are:

  • Sole proprietors and single-member LLC owners that file Schedule C
  • Partners in partnerships, LLC members
  • S-corporation shareholders filing Schedule K-1 for their share of business earnings

How Will This Affect Corporations? 

Corporations (those who don’t file a consolidated return) may also delay federal income tax payments due on April 15 to July 15. Even corporate income taxes due after April 15, because of varying fiscal (financial) years, are now due on July 15. (The IRS recently changed the guidance to delay the deadline for any payments due before July 15.)

Interest and Penalties 

If you pay the full amount of tax due by July 15, 2020, you won’t have to pay interest or penalties. The interest and penalties will begin to accrue after that deadline, on July 16.   

Are Quarterly Estimated Tax Payments Extended? 

You can postpone making any estimated tax payments that would normally have been due before July 15. This includes payments for the first quarter of 2020 —usually due by April 15—as well as second-quarter payments typically due on June 15.

What About Payroll Tax Report Deadlines?

Under the CARES Act of 2020, employers may defer deposit and payment of the employer's share of Social Security taxes that would have been payable beginning on March 27, 2020, and ending December 31, 2020. IRS Form 941 is being revised to include these deferrals. The employer share of Social Security taxes is 6.2% of Social Security wages for all employees for the quarter. See this article with FAQ's about the deferral for more information. 

What About My State Tax Payments? 

All 50 states with a personal income tax have extended the April 15 deadline. Check this American Institute of CPAs database for details on your state's deadlines or with your state tax agency for more information.

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