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|Posted on April 16, 2020 at 9:19 AM|
Another of the many outcomes of the pandemic has been the stream of advisories coming from the IRS regarding the relaxing of various tax requirements. The usual date of April 15 for filing and paying one’s 2019 income tax return has been extended all the way to July 15. This extension also includes the timing of IRA contributions counting towards the 2019 tax year. If you owe taxes and need time to get things in order to file and pay, this is a blessing. However, if you are expecting a refund, the extension has little, if any, value to you and you likely would not wish to delay your filing. Similar extensions apply to the filing and payment of gift tax returns, generation skipping tax returns and the like.
No special forms or filings are required to obtain the extensions. That said, these extensions DO NOT apply to obligations to file and pay state income taxes. So it would be wise to check with your state to ascertain whether any extension may be available. Also note that the IRS presently is NOT accepting paper filings so it is important to use online filing if you are concerned about getting it done anytime soon.
For older taxpayers facing required minimum distributions, the IRS has suspended that requirement for this tax year and there is no need to take such a distribution and no penalty will be assessed for the failure to do so. If a distribution has been taken, the IRS permits the taxpayer to roll the funds back into the qualified plan from which they took the withdrawal. There is an extended period beyond the usual 60 days available for the roll back as well.
Employers, including the self-employed, may take advantage of a provision deferring the deposit and payment of the employer’s share of social security taxes. To avoid penalty, the deferred amounts must be deposited on specified dates: 50% of the total deferred amount by December 31, 2021 and the remaining amount by December 31, 2022. This can be a substantial benefit to employers and the self-employed for the amount of these taxes originally due in 2020.
These are some of the most relevant adjustments applicable to individuals and there are more items you may wish to explore with your tax professional.