In an effort to lift some burden off everyone’s shoulders, the Treasury and the IRS have imposed an extended federal tax filing deadline. Instead of the usual April 15, this year’s deadline has been moved to July 15, 2020—including an extension to pay what you owe. 

The two government agencies also announced that taxpayers can defer the tax year 2019 federal income tax payments that were due on April 15, 2020, to July 15, 2020, without incurring additional penalties and interests, regardless of the amount owed. Additionally, this deferment extends to the tax year 2020. The first and second quarter estimated tax payment previously due on April 15 and June 15, respectively. With the deferments of federal tax payments, this means that if you owe money on your federal taxes, you are granted more time to pay what you owe. There is no need to file any additional forms or contact the IRS to qualify for payment relief. 

To help you navigate this trying time, here is a quick guide on everything you need to know about the COVID-19 relief:

Who is able to defer payment?

All taxpayers are eligible for payment deferment. That includes individuals, trusts and estates, and corporations. Non-corporate tax filers and those who pay self-employment tax are also allowed to defer tax payments. 

What will happen if I pay after April 15?

Should you decide to defer tax payments and pay what you owe after the initial deadline of April 15, you will not be incurring penalties and interests, as long as you pay federal taxes by the new deadline on July 15, 2020. You will only get fined when you pay after July 15. What’s more, many states have issued different rules on state tax filings. 

Hawaii, Idaho, Iowa, Mississippi, and Virginia all have different tax filing and payment deadlines. The states North Carolina and Virginia have extended the tax filing and payment deadlines but will slap you with interest on any taxes owed paid after the original deadline of April 15. To be sure, you may want to check the latest information about tax deadlines on your state’s website.

What will I do if I want to reschedule my payment for July 15, 2020?

If you have already scheduled payment through IRS Direct Pay, you can use your confirmation number from the payment (which was sent to your email after scheduling) on the Look Up a Payment feature. You are allowed to modify or cancel a scheduled payment until two business days before the predetermined date. 

If you scheduled payment through Electronic Federal Tax Payment System (EFTPS), all you have to do is click on Payments from the EFTPS home page, log in, and then click Cancel a Tax Payment from the left menu and follow the instructions. You are given two business days before the scheduled payment date to do this. 

Now, if you scheduled payment as part of filing your tax return, you may revoke it by contacting the U.S. Treasury Financial Agent at 888-353-4537. You can make cancellation requests no later than 11:59 p.m. ET two days prior to the supposed payment date. For payments scheduled by credit or debit card, you may contact the card processor to cancel the payment.

What should self-employed people do to defer payments?

The deadlines for the first and second quarter of 2020 estimated income tax payments have been extended as well. Instead of April 15, self-employed professionals can pay on or before July 15, 2020.

As long as you file and pay your taxes by July 15, 2020, then you shouldn’t have to worry about getting slapped with exorbitant penalty fees. 

Should you need any assistance tackling the deferment of your taxes, get in touch with us today. We’re happy to help!