Federal Income Tax Update
Updated: Mar 24
Last week the Treasury Secretary Steve Mnuchin laid out his Department’s plans to “extend” the traditional tax day, April 15th, for most taxpayers, to July 15th. This will extend the April 15th filing and payment due date to July 15th, 2020. With this news, please keep in mind the following:
As of today, July 15th is the new filing and payment deadline.
The relief also applies to first quarter 2020 quarterly estimated income tax payments that are also due on April 15, 2020. This is a clarification and update from the initial message earlier this week. It provides relief for many self-employed individuals and/or pass-through entity owners who typically have cash payments due on April 15th.
Payment relief is different depending on if you're an individual or a corporation. For individuals, you can defer up to $1 million in aggregate Federal income tax for all cash payments due (2019 tax due and 2020 1st quarter installments). This is regardless of your filing status. Please note, each state will issue their own guidance. If you have state tax obligations as well, we’re happy to discuss with you your individual state’s relief efforts.
If your return has already been prepared and filed, but you have not yet submitted payment, then please consider the extended payment due date of July 15th and your personal cash-flow needs as we navigate the current uncertainties.
Please note, other relief measures have already been granted and put into place for businesses most directly impacted by the response to COVID-19 through lending measures under the SBA, and more relief is still planned for taxpayers through stimulus payments and measures.
If you have questions on any of this, please let us know.
Thank you Mary and Rick from MCV Tax & Advisory services for providing us with this information.