In light of the current coronavirus pandemic, President Donald Trump has directed the Treasury Department and the IRS to extend the federal income tax return filing deadline. On March 17, Treasury Secretary Steven Mnuchin confirmed that the filing deadline will be extended by 90 days.
The change is being put in place for the 2019 tax year only, with the April 15, 2020 deadline is being delayed with President Trump instructing the treasury to “defer tax payments without interest or penalties for certain individuals and businesses negatively impacted.”
Individual taxpayers who are typically required to file their annual tax returns by April 15, now have a three-month reprieve with the deadline moving to July 15 for all 2019 tax filings. The new July 15 deadline also extends the time to pay tax due on balances of up to $1 Million, it also applies to corporate tax returns with taxes due of up to $10 million.
Forming part of the US governments emergency coronavirus response program, the relief is also expected to help small businesses and pass-through entities. However, for those not currently affected by the coronavirus, the advice is to file as soon as possible and in particular if a cash refund is expected, with Steven Mnuchin stating that “We encourage those Americans who can file their taxes to continue to file their taxes by April 15 because for many Americans, you will get tax refunds.”
On the surface this advice may seem like the carrot on a stick, but according to the IRS of the 65 million income tax returns filed as of March 6, 52.7 million filers have received a tax refunds, averaging $3,012 each.
Although it is not unusual for the IRS to grant extensions to specific areas affected by disaster, this is the first time it has been offered on a national level. In addition, with a high proportion of individuals filing their federal and state income tax returns at the same time, many of the state legislatures are likely to follow suit.
However, it is unclear if all states will follow the new federal guidelines. As such taxpayers are encouraged to contact their respective state taxing authorities to confirm.
The American Institute of CPAs has compiled a list of changes for reference https://www.aicpa.org/content/aicpa/news/aicpa-coronavirus-resource-center.html.
Should you have any queries regarding your U.S. Tax requirements or the deadlines, please contact our dedicated team on 01932 320800 or email firstname.lastname@example.org.