By Theresa Fry, Senior Vice President and Manager, IRA’s and Retirement PlanningPrint This Post
Until recently, the phrase “social distancing” was not part of our everyday vocabulary. These are unprecedented times we are living in. Many Americans are struggling not only with the fear and anxiety of a pandemic, but also with the financial stresses caused from reduced work hours, lower paychecks, and homes full of loved ones who must be fed and cared for. Businesses, and small-business owners in particular, may have difficulty keeping their doors open. Add to that the additional stress of having to pay income taxes, and it is easy to see why Americans are concerned.
On March 20th, the U.S. Treasury and IRS issued Notice 2020-18 announcing a 90-day extension for filing 2019 income tax returns. This notice was in addition to an earlier notice that extended the due date of income tax payments for individuals and businesses. By extending until July 15, 2020, it will allow an estimated $300 billion to remain available to individuals during the outbreak of the COVID-19 virus.
The extension applies to the payment of income taxes, and the filing of income tax returns.
Some things to keep in mind about this extension of time:
- No interest or penalties will apply between April 15, 2020 and July 15, 2020.
- Traditional and Roth IRA contributions for 2019 are also extended and must now be made by July 15, 2020.
- Employer retirement plan contributions – such as employer match, non-elective, or profit- sharing contributions – if otherwise due on April 15, 2020 have been extended to July 15, 2020.
- It includes self-employment tax payments and estimated tax payments that would normally be due April 15, 2020.
- The extension is for federal income tax returns and tax payments only; state income tax returns and payments are not affected by this announcement.
If you are one of the estimated 890,000 taxpayers expected to owe income taxes this year, hopefully this will provide some financial relief. For additional information about the impact of this announcement on your personal income tax situation, please contact your tax advisor.
The information provided is based on internal and external sources that are considered reliable; however, the accuracy of this information is not guaranteed. This piece is intended to provide accurate information regarding the subject matter discussed. It is made available with the understanding that Benjamin F. Edwards & Co. does not provide legal or tax advice, therefore it is also important to consult with your legal and tax professionals for additional guidance tailored to your specific situation.