Coronavirus has caused delays to tax return processing as well as payment processing
The Internal Revenue Service has delayed processing payments and paper returns due to the COVID-19 lockdown that shuttered America. People who sent tax payments to the IRS using paper checks are most affected and it will take some time for the IRS to catch up.
Do not send another paper check if your original paper check still hasn’t cleared the IRS account. It is part of the backlog of tax returns and other unsorted, unopened IRS business mail.
The IRS should not penalize a taxpayer if the IRS, itself, is late opening the mail. If a tax return or check is postmarked by the due date, they will consider it an on-time payment and there will be no fines or fees.
IRS flexibility during the pandemic
Normally the IRS charges a $25 NSF penalty for bounced checks under $1,250. This year, in response to overwhelming financial hardship and delays at the IRS, it is waiving fees for dishonored checks received between March 1 and July 15.
Update from Sean Core CPA regarding Tax News and Impact from the Coronavirus (COVID-19) April 2020
If a taxpayer missed a filing deadline despite their best efforts, the IRS promises to be flexible and may even offer penalty relief. It has been suggested to write “COVID-19” on the return with a note describing why the payment is late.
The IRS extended the filing deadline to July 15 and allowed an extension to October 15. The IRS also extended the contribution date to an individual retirement account (IRA), health savings account (HSA), Archer medical savings account (Archer MSA), and Coverdell education savings account (Coverdell ESA) to July 15. This gives greater flexibility for taxpayers to claim prior-year contributions, depending on their individual situations.
2020 has been an unusual tax year resulting in unusual delays, but also unusual penalty forgiveness. To avoid unnecessary penalties, document your mailing dates and detail your circumstances on your returns and correspondence–especially if it’s a few days behind.
Reminder: if you requested an extension earlier this year, your new filing deadline, October 15th, is fast approaching!. If you haven’t taken care of your 2017 taxes yet it’s time to get that task back on your radar.
In light of the looming deadline, we wanted to take a moment to share these tips for extension filers.
Just get something filed.
Many of our clients file extensions because they can’t get the paperwork they need quickly enough to file an accurate return by April 15th. If this is the boat you’re in wanting to wait seems intuitive, but you can’t always do it and meet the deadline as well. When you don’t file on time, you open yourself up to failure-to-file penalties.
When this happens, file a return, even if it’s not going to be 100% accurate. A new clock will start ticking. You’ll have 3 years to file amended returns, which will give you plenty of time to get the rest of the paperwork you need. Of course, we don’t recommend waiting all three years to get the amended returns handled.
Consider a last-minute SEP-IRA contribution.
Self-employed? The good news about filing an extension is you get another chance to make a last-minute deduction. You have until October 15th to contribute just a little more to your SEP-IRA, the retirement savings account type designed just for freelancers and contractors.
Consult with us about the amount which will give you the biggest benefit, then get it done. Be sure to use a check so you can write the year the contribution should be credited under on the check, and keep a copy for your records.
See also: 7 Common Tax Problems the Self-Employed Business Owner Should Avoid.
Get our help now…not in October.
When you file for an extension you can take care of your taxes any time between April 15th and October 15th. In fact, we recommend it. The point is getting some additional time, not giving yourself another stressful day to scramble over. Waiting until the last minute makes it easy to make mistakes, too.
In fact, if you’re using our accounting services to get your returns filed (and, if you’re the type of taxpayer who needs an extension, you really should be using us)… the time is right now to do so!
Some of our clients have even tighter deadline to deal with, and/or hire us for bookkeeping and payroll, so by mid-September we’ll be up to our elbows in returns. If you’re a new client we might not even be able to squeeze you in if you wait too long. And if you’re an existing client, wouldn’t it feel better to know your taxes are taken care of?
Tax Due Dates for AZ Businesses
The 2018 tax year will bring with it several changes to the tax code. With the alterations, it is important to plan ahead for your business filings and individual taxes. This way, you can prepare yourself for different filing dates while ensuring you have the necessary monetary amounts covered (if you need to pay in). As a business owner in Arizona, here are important tax dates for 2018 each of you need to know.
January 16, 2018
Coming up quickly is your 2017 fourth quarter estimated tax payments. Whether you own a business or are self-employed, it is necessary to pay this quarterly amount. Make sure to have it postmarked no later than the 15th of January.
March 15th, 2018
Partnership and S Corp Business Tax Returns are due. You may file an extension which allows an additional 6 months to file.
April 17, 2018
Individual Taxes Due. So for business owners who are filing personal tax returns, this is the day their return is do. All tax returns must be postmarked by midnight on April 18, unless an extension has been submitted.
If you are applying for an extension for your individual return, it is also due on this day. Applying for an extension will extend the filing of your return until October 15 of 2018. However any taxes owed must be paid with the extensions.
C Corporation Business tax returns and taxes are due. An extension may be submitted to extend the filing of your business return until October 15 of 2018.
Additionally, your second quarter 2018 business estimates are due on this day.
June 15, 2018
Your second quarter business estimates are due on June 15, so make sure you have your paperwork and payments postmarked by June 15.
September 17, 2018
Your third quarter business estimates are due on September 17. Have everything postmarked by the end of the 17th.
Your Partnership and S Corp Business tax returns are due.
October 15, 2018
If you filed for an extension back in April for your personal tax returns, today is the day your extension is due. You need to make sure you have everything postmarked by the 15th.
January 15, 2019
This is the day your final fourth quarter business estimate payments are due.
Staying on top of your business tax returns is so important. As a business owner filing is a bit different, as you likely need to file quarterly. Plus, with the recent changes to the tax codes going into 2018, it is a good idea to give yourself a bit more time to file. This way, you can understand what is going on with your personal and business tax returns. Just make sure to stay on op on these dates as it will help you stay on top of both your IRS and your Arizona Department of Revenue tax returns.
Just remember, if you need help with your tax returns, have questions or would like to know more about the changes in the tax code, feel free to contact our office to help you with your business taxes or individual taxes, or send us an email at your earliest convenience.