COVID-19 has changed life in the U.S. and stalled the economy. Businesses are closed and people are forced to “stay-at-home” in order to keep everyone safe. No wonder that Congress and the IRS have taken measures to help those people who have been impacted. Two of these measures are the IRS’ postponement of Tax Day and the COVID-19 Stimulus Payments.
On March 21, 2020, just two days after the IRS extended the tax payment deadline to July 15, the IRS announced that they’d be delaying the normal April 15 deadline for filing taxes. Now both the tax filing and payment deadlines are automatically extended to July 15. So, as most people know by now, you now have until July 15 to file your taxes without having to pay penalties and interest, regardless of the amount owed.
Individuals can also still request a filing extension by filing Form 4868 if they need additional time to file beyond the July 15 deadline. This will not give you more time to pay but can reduce penalties once you do file.
To help struggling Americans, on March 25, 2020, Congress has passed the Coronavirus Aid, Relief and Economy Security (CARES) Act. This two trillion stimulus package includes payments to individuals that will be deposited to bank accounts in the next few weeks.
Under the CARES Act, for those who qualify, $1,200 will be given to individual taxpayers, $2,400 will go to married couples filing jointly, and an additional $500 will go to families for each qualifying child under the age of 17. To qualify for the full amount, individuals must have an adjusted gross income (AGI) of $75,000 or less and married couples filing jointly must have an adjusted gross income of $150,000 or less. The payments decrease if AGI is greater than these amounts and will not be provided if AGI is greater than $99,000 for individuals and $198,000 for married couples.
The amounts of the stimulus payments will be based on your 2019 tax return, so it is still important to file your 2019 tax return as soon as possible. If no 2019 return has been filed, the stimulus payments will be based on your 2018 tax return. The COVID-19 stimulus payments will be directly debited into the account listed on your most recent tax return and the IRS will send a letter by mail to notify you of the payment.
If you have prior years of unfiled tax returns, you should file as soon as possible to avoid penalties and interest on those years. If you’re concerned about unfiled returns, and what you could be facing, schedule a free, no-obligation, confidential phone consultation at Boeshaar Law. If you think you might owe back taxes for other years or haven’t filed your 2018 or 2019 income tax return, you’re still going to find yourself in tax trouble, so contact us today.
Despite the extended deadline, you should file your 2019 tax return as soon as you can. If you owe taxes for 2019, you can avoid penalties and interest that will accrue if you miss the July 15 deadline. If you are not sure whether you will owe, or will get a refund, filing before July 15 can let you know. It will also give you time to prepare for the financial burden you might face, especially during these uncertain times.
Our firm knows tax resolution – our founder worked as an attorney for the IRS for fourteen years. We can provide additional help with COVID-19 SBA Loan programs. We also serve clients virtually so don’t hesitate to contact us. If you want someone who knows how to navigate the IRS maze, reach out to our firm and we’ll schedule a no-obligation confidential consultation to explain your options to permanently resolve your tax problem. www.boeshaarlaw.com
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