April 15 (Extended to July 15)
- Individual tax returns due
- C corporation tax returns due
- First-quarter 2020 estimated tax due
- Easter Sunday
The IRS rolled out deadline extensions and new programs to help individuals and businesses navigate the COVID-19 pandemic. A recap of these announcements is included here for your review. Also in this month’s edition is an interesting tax quiz to see if you can guess which states have the highest taxes! All this plus an interesting way to keep your spare change digitally. These are challenging times. Rest assured as things change on the tax landscape, you will be among the first to know. Please stay safe.
Tax Deadlines Move to July 15
The April 15 federal income tax filing due date has been moved to July 15, the U.S. Treasury Department and IRS recently announced. Here is what you need to know:
- The due dates for all tax payments normally due April 15 have been pushed back 90 days to July 15, regardless of the amount owed. This applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.
- Payments that can be extended to July 15 include income tax payments and self-employment tax payments that are associated with the 2019 taxable year. Also extended are estimated income tax payments for the 2020 taxable year.
- The 90-day extension from April 15 to July 15 is automatic. No additional forms must be filed to receive the 90 day extension.
While the federal government grants you an additional 3 months to file and pay your 2019 taxes, you may wish to still file your tax return by April 15. Here are some thoughts on different situations.
You anticipate a refund. If you are expecting a refund, file your tax return immediately. A refund right now can come in handy.
An extension might still make sense. The normal tax extension filing moves the tax return date to October 15, 2020. While payments are now due on or before July 15, a simple extension buys you more time to file your tax return.
Watch for state announcements. States are rolling out their own guidelines for extensions. Since most states require copies of federal tax return information, be prepared to still file by April 15. Remember, even if you wait until later to file your federal return and pay your tax, you may have to file your state and/or local return sooner.
What if I get a penalty anyway? Affected taxpayers subject to penalties and additional tax despite this relief provision may seek a waiver.
Rest assured, as the rules and deadlines change, updates will be provided. In the meantime, please stay safe during this challenging time.
Note: This is a fast changing topic. These rules are as of March 24, 2020.
New Law Requires Small Business to Provide Paid Leave
Families First Coronavirus Response Act provides worker benefits
The Families First Coronavirus Response Act is a new program that offers COVID-19 assistance for both employees and employers.
This new law provides businesses with fewer than 500 employees the funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members.
Here are the details of the new law’s benefits:
- Paid Sick Leave for Workers: The new law provides employees of eligible employers two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay where the employee can’t work because the employee is quarantined and/or experiencing COVID-19 symptoms and seeking a medical diagnosis.
- Other Paid Leave for Workers: Employees can receive two weeks (up to 80 hours) of leave at two-thirds the employee’s pay if they need to care for someone in the following situations: The need to care for an individual subject to quarantine, to care for a child whose school is closed or childcare provider is unavailable for reasons related to COVID-19.
- Extended Leave: In some instances, an employee may receive up to an additional ten weeks of expanded paid family and medical leave at two-thirds the employee’s pay.
- Companies will get paid back: Businesses who pay employees the mandatory sick and childcare leave according to the new law will get completely reimbursed through a payroll tax credit.
What it means for you
- Employees can take the necessary time to recover from being infected with COVID-19, or to care for a loved one, without fear of losing their job or salary.
- Employers can help their employees financially while navigating COVID-19 related shutdowns.
Keep Your Social Security Number Safe
Identity thieves are very active right now
Countries and citizens around the world are banding together to defeat the coronavirus. While your attention is concentrated on protecting your family, friends and community, identity thieves are seeing an opportunity to swipe your confidential information.
Very few things in life create a higher degree of stress and hassle than having your Social Security Number (SSN) stolen, especially during a pandemic like we are now experiencing. This is because, unlike other forms of ID, the SSN is virtually permanent. While most instances of SSN theft are outside your control, there are some things that you can do to minimize the risk of this ever happening to you.
- Never carry your card. Place your SSN card in a safe place. This place is NEVER your wallet or purse. Only take the card with you when you need it, then return it immediately to your designated safe place.
- Know who needs it. As identity theft becomes more common, there are fewer people or organizations who really need to know your Social Security number. Here is a list of entities who still need your SSN:
- The government. Federal and state governments use this number to track your earnings for retirement benefits and to ensure you pay proper taxes.
- Your employer. The SSN is used to track your wages and withholdings. It is also used as proof of citizenship and to contribute to your Social Security and Medicare accounts.
- Certain financial institutions. Your SSN is used by various financial institutions to prove citizenship, open bank accounts, provide loans and establish other forms of credit.
- Know who really does not need it. Many other vendors may ask for your Social Security number, but having it is not an essential requirement. The most common requests come from health care providers and insurance companies. But the request for your number may come from anyone who wishes to collect an unpaid bill. When asked on a form for your number, leave it blank. Challenge the provider if it is requested.
- Destroy and distort. Shred any documents that have your SSN listed. When providing copies of your tax return to anyone, distort or cover your SSN. Remember your entire SSN could appear on the top of each page of Form 1040, although that is becoming less common. If the government requests your SSN on a check payment, only place the last four digits on the check, while pre-filling the first five digits with x's.
- Keep your scammer alert on high. Never give out your SSN over the phone or via e-mail. Do not even confirm your SSN to someone who happens to read it back to you on the phone. If this happens to you, file a police report and report the theft to the IRS and Federal Trade Commission.
- Proactively check for use. Periodically check your credit reports for potential use of your SSN. If suspicious activity is found, have the credit agencies place a fraud alert on your account. Remember, everyone is entitled to a free credit report once a year. Multiple businesses can provide you with your free credit report.
Replacing a stolen SSN is not only hard to do, it can create hardships. You will need to re-establish your credit history, re-assign your SSN benefits history, and realign your tax records. Your best defense is to stop the theft before it happens.
As always, should you have any questions or concerns regarding your tax situation please feel free to call.
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Posted on Wed, April 8, 2020
by Sherri Lareau