Answers to the top queries on tax regulations during COVID-19
Answers to the top queries
on tax regulations during COVID-19
The outbreak of the pandemic COVID-19 has created huge economic disruption globally. Amidst all the chaos and economic troubles, the US Government has announced certain changes related to the tax filing activities. Amongst these changes, the most important one is the extension in the deadline for federal tax filing to 15th July 2020. This step has been taken by the US Government to provide some relief to concerning handling taxes amidst the trauma spread by the COVID-19.Answers to the top queries on tax regulations during COVID- 19.
Now, with these changes been introduced by the US Government, it is quite obvious for you to have several questions related to the changes made, new tax deadlines and other associated impacts. Let us check out the answers to all the evident questions related to these changes introduced by the IRS.
- Is there a possibility of state taxes to have a different deadline?
Mostly, a majority of the states have confirmed to the same extended deadline as that of the Federal tax i.e. 15th July 2020. However, there can be some states which will have different tax deadline than that of the Federal tax. You can know in detail about your State tax filing deadline by checking with your respective state tax agencies.
- Can I file my tax return according to the original tax filing deadline i.e. by 15th April 2020?
Yes, you can file your tax returns according to the original deadline i.e. 15th April 2020. If you expect a refund from the IRS it is advisable to file your tax returns now to get your refund money soon.
- Is there a probability of obtaining the tax refund being delayed?
There are no such probabilities of tax refund being delayed and would be processed as normal. If the tax return has been filed by electronic medium or via direct deposit then it would be refunded within a maximum of 21 days.
- Is there any specific eligibility for availing this extended deadline for filing a federal tax return?
Any person who has a federal income tax payment or returns due on 15th April 2020 is eligible for availing the relief of the extended timeline. Here “person” can denote an individual, an estate, a trust, a corporation or even a business entity. The payment here refers to the Federal income tax payments for 2019 and the estimated federal income tax payment 2020. It must be noted that the return or tax payment must be due on 15th April 2020 and this relief does not apply to any return/payment due on any other date.
- Does this extension in the tax filing deadline means that I can some more time for making contributions to my HSA?
You can make contributions to your HSA anytime until the extended tax filing deadline. Since the tax filing deadline has currently been extended to 15th July 2020you can make your contributions into HSA until then.
- I have already filed my tax return 2019 which was due on 15th April 2020 and even I have to pay taxes that are not paid yet? What can be done to avoid penalties and interest?
You can avoid penalties and interest by paying your income tax by 15th July 2020. Interest/penalties will be charged only after 15th July 2020 if the due tax has not been paid. In case of filing the tax return by Form 1040 or Form 1040-SR the amount to be paid will be found on Line 23. If the return has been filed by using Form 1040-NR, the amount can be found on Line 75. For a corporation that is filing a return using Form 1120, the tax amount can be found online 35.
- Does this extension in the tax filing deadline mean I have more time to make contributions to my IRA for the year 2019?
Contributions into IRA for a particular year can be made till the tax filing due date of that year. Now since the income tax filing for the year 2019 has been shifted to 15th July 2020 you can make contributions to your IRA till 15th July 2020.
- What to do if I am not able to pay my taxes due on 15th April 2020 by 15th July 2020 even?
If you are individual and are not able to pay your taxes that are due on 15th April 2020 even by 15th July 2020 then you must request an automatic extension. You will have to request for this automatic extension by 15th July 2020 and can be done by electronically filing Form 4868. Business entities and trusts can file for this extension by filing Form 7004.
Hence, these are some of the common queries answered related to the extension of the federal tax filing deadline. This effort by the US Government during these times of emergency is sure to reduce stress related to finances up to some extent.