The latest IRS filing data indicates about 7.6 million fewer returns have been filed with the IRS than this time last year. That means millions of people still need to file before the tax deadline, which means if tax professionals aren’t communicating with their clients, it will be a long few weeks.
With about 72% of taxpayers receiving a tax refund at an average of $3,000, refund checks can have a significant impact on many Americans’ finances — especially this year. We know these are challenging times, and for tax professionals, it’s important to connect with clients to make sure they are submitting the right forms to get the most out of their return this year.
Here are a few things to keep in mind as we get closer to the deadline.
- For most taxpayers the filing and payment deadline was postponed until July 15.
- File your tax return by July 15 to receive your refund.
- Those who need more time to file beyond the postponed date can request an extension to file. Taxpayers must request an extension to file by July 15. This gives them until October 15 to file their tax return. An extension to file is not an extension to pay. Taxes must be paid by July 15.
- Estimated tax payments for tax year 2020, originally due April 15 and June 15, are now due July 15. This means that any individual or corporation that has a quarterly estimated tax payment due has until July 15 to make that payment without penalty.
- With 159 million Economic Impact Payments processed, the IRS reminds many low-income Americans who don’t usually file tax returns to register for a payment by October 15. Millions of low-income people and others who aren’t required to file a tax return may be eligible for an Economic Impact Payment and can easily register for a payment by using the free Non-Filers tool, available only on IRS.gov.
- Anyone who already took a required minimum distribution (RMD) in 2020 from certain retirement accounts now has the opportunity to roll those funds back into a retirement account following the CARES Act RMD waiver for 2020. The 60-day rollover period for any RMDs already taken this year has been extended to August 31, 2020, to give taxpayers time to take advantage of this opportunity. (per IRS)
Most commonly asked tax questions this season
What is the deadline for applying for a Paycheck Protection Program loan?
- June 30, 2020
What is the deadline for applying for loan forgiveness under the Paycheck Protection Program?
- Apply for forgiveness at the end of the applicable Loan Forgiveness Covered Period (8 or 24 weeks after loan origination), or earlier if you spent all your PPP funds.
What is the Employee Retention Credit under the CARES Act?
- An alternative to the Paycheck Protection Program that incentivizes employers to keep employees on the payroll even though the business is adversely impacted by the new coronavirus.
Have there been any tax law changes that small businesses need to know about?
- Net operating losses can now be carried back two years and the taxable income limit has been relaxed.
- Qualified improvement property (leasehold, restaurant and retail improvements) are now eligible for 100% bonus depreciation and a 15-year depreciation life (instead of 39 years).