KEY POINTS
  • Earlier this spring, the Treasury Department moved the deadline for 2019 individual income tax returns to July 15. Other deadlines, including the June 15 due date for second quarter tax estimates, were also pushed to July.
  • Accountants and tax preparers are gearing up for the new tax season, gathering documents and preparing returns.
  • Still need more time to prepare your 2019 return? File for an extension, which will give you until Oct. 15 to submit your documents. Don’t forget: Taxes owed must be paid by July 1

Call it the never-ending tax season.

It may be hard to believe, but taxpayers have approximately six weeks to file their 2019 income tax returns and pay taxes owed to the IRS.

July 15 is the new Tax Day, as the Treasury Department moved the deadline to help taxpayers contend with disruption related to the coronavirus pandemic.

For accountants, the new deadline is added stress. Many have been spending the last two months guiding small businesses through the CARES Act and the Paycheck Protection Program — and they’re swamped.

“What we’d normally be doing in March and April is what we’re getting into now,” said Brian Streig, CPA and tax director at Calhoun Thomson and Matza in Austin.

“Now you have all of these tax returns, and we’re getting them all done by July 15,” he said. “We’re in extension mode, like we would’ve been back in March.”

Tax filers who aren’t confident  they’ll get their paperwork ready by next month can request an extension.

That would give them until Oct. 15 to submit returns, but they’ll still need to pay any taxes owed by July 15.

What needs to be in

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The due date for 2019 individual income tax returns, along with that year’s tax payment, are just two of the items that were pushed into July.

People who pay quarterly estimated taxes – for instance, independent contractors – were also given until July 15 to cover amounts due for the first and second quarter of 2020.

Ordinarily, those deadlines would have been April 15 and June 15, respectively.

Further, Americans abroad, who would have normally had until June 15 to submit their 2019 tax return, now have until next month to file and pay taxes due.

The IRS compiled a list of spring deadlines that have been pushed into July here.

Just as filers have more time to turn in last year’s tax returns, they also have extra time to top off their savings accounts.

You have until July 15 to save up to $6,000 in your individual retirement account (plus $1,000 if you’re 50 and over), and have the contribution count for 2019.

Many savers can also claim a tax deduction for making that IRA contribution, based on their modified adjusted gross income for 2019, even if they had a retirement plan at work.

If you were in a high-deductible health plan, you can also stash more money into a health savings account.

You normally save in an HSA on a tax-deductible or pretax basis and have your money grow tax free over time. If you use the proceeds to cover qualified medical costs, you can do so tax free.

For 2019, the maximum contribution is $3,500 for self-only coverage ($7,000 for family plans). Accountholders turning 55 can throw in an extra $1,000.

Regroup and file

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Don’t wait until the day before the deadline to pluck last-minute deductions and credits.

You might qualify for a couple of “tax extenders,” a package of tax breaks that must be renewed by legislators each year. Those write-offs include a $4,000 deduction for tuition and fees for your college student – and you don’t have to itemize on your taxes to scoop this one up.

You won’t know you qualify until you perform an inventory of your statements from last year, of course.

Taxpayers should also pay close attention to what’s going on at the state level. While most states have pushed their filing deadlines to July 15, not all of them have. Filers in Virginia, for instance, were supposed to pay individual and corporate income taxes by June 1.

The American Institute of CPAs keeps a list of states and their deadline updates here.

Finally, if you’re due a refund and you need the money, hustle your paperwork to the IRS. The taxman issued 89.8 million refunds as of May 22, giving filers an average check of $2,772.

“If you’re getting a refund, just file your return and get it,” said Thomas Neuhoff, CPA at Henry & Peters in Tyler, Texas.

source article: https://www.cnbc.com/2020/06/02/tax-day-is-coming-soon-what-you-need-for-july-15.html