July is America's big celebratory month. The major time to party is, of course, on the United States' birthday, July 4.
But in 2020, the tax community's revelry will be on July 16. That's the day after this year's revised Tax Day of July 15.
And now we tax geeks, gurus and everyday Joe and Jane Taxpayers will have even more to celebrate since the Internal Revenue Service has expanded the July 15 due date to more tax situations.
Below is a review of the key tax deadlines that now fall on July 15.
Tax return filing and payments: Individual federal income tax returns for the prior year, 2019 in this case, now are due on July 15 instead of April 15. That's also the date that taxpayers must pay any tax due for the previous year. The IRS says it will not impose any late-filing or late-payment penalties or start collecting interest on filings and payments made by July 15. After that date, those the added cost meter starts running, so mark your calendars and don't miss the new July 15 Tax Day.
Estimated tax payments: Folks who get income that's not subject to withholding typically have to pay the due federal tax on that money by making estimated tax payments. There are four deadlines for estimated taxes: April 15, June 15, Sept. 15 and Jan. 15 of the next year.
When the IRS pushed the 2020 Tax Day to July 15, it also said affected filers also could delay making their first estimated tax payment, normally due in April, to July 15. But the June 1040-ES deadline stayed in that month. Until this latest IRS decision.
Now both the April and June estimated tax payments, for both individual and corporate taxpayers, can be made as late as July 15 without incurring any penalty.
Unclaimed tax year 2016 refunds: Every year, folks who are due tax refunds don't file a return. That means that they don't collect their money. The Treasury holds onto it and, for a while, you have the chance to get it by filing the necessary Form 1040. But only for a limited while, specifically within three years of when you first were eligible to get the refund. If you don't claim your tax cash within three years, Uncle Sam gets to keep it. Forever.
The three-year deadline usually ends on the filing deadline three years from the time you should have filed for your refund. That means that folks who didn't collect their 2016 tax year refunds, which should have been filed for by Tax Day 2017, now have until Tax Day 2020. Since that's now July 15, that's the new deadline for claiming your unclaimed 2016 tax year refund.
I'll have more on 2016 tax year unclaimed refunds later as the new, July 15 due date nears. In the meantime, you can get an idea of this process by reading my post about tax year 2015's unclaimed refunds.
Taxpayers living outside the country: Usually, U.S. taxpayers who are working or posted (yep, this covers military filers, too) outside the country don't have to worry about the April deadline. They normally have until June 15 to file their taxes.
But as we all know, the COVID-19 crisis is a global pandemic. So fittingly, the IRS says that American taxpayers who live and work abroad now can wait until July 15 to file their 2019 federal income tax returns and pay any due taxes.
Tax acts beyond July 15: Even though most taxpayers now have three more months to complete tax tasks, some of us will find we still can't meet the July 15 deadline. No judgement and no worries. You still can get more time to file your return by asking for an extension.
The normal Form 4868 will still work here. Note, however, that this six-month extension's due date does not change. You still will have until Oct. 15, file, not six months from the new July 15 deadline.
Businesses who need additional time must file Form 7004.
Another thing that's still relatively normal in this abnormal tax season is the extension rule still applies. An extension to file is not an extension to pay any taxes owed.
Taxpayers requesting additional time to file should estimate their tax liability and pay any taxes owed by the July 15 deadline to avoid additional interest and penalties. Then get your forms in by Oct. 15 to avoid even more added charges.
Time-sensitive tax action delay: In addition to filing annual taxes (current or from years ago) or making estimated payments, many taxpayers are dealing with other tax matters. This includes coping with an IRS examination, or as we taxpayers call it, an audit, or appealing an agency decision or even taking a case to Tax Court.
The coronavirus, however, has disrupted these processes. The IRS has shuttered offices, meaning many of its employees are trying to do their jobs remotely. The Tax Court has closed. These COVID-19 precautionary moves mean that both IRS staff and taxpayers now face limited access to many documents, systems or resources.
To account for that, Treasury and the IRS are giving folks who are facing impending tax deadlines more time to deal with time-sensitive tax actions. Specifically, they now have 30 more days to complete actions whose original deadline was on or after April 6 and before July 15. This grace period should help as both sides as they try to assemble material necessary to resolve disputed tax matters.
More time for most: The bottom line of this latest IRS announcement is that the July 15 extended deadline now generally applies to all taxpayers — individuals, trusts, estates, corporations and other non-corporate tax filers — who have a filing or payment deadline falling on or after April 1, 2020, and before July 15, 2020.
|Coronavirus Caveat & More Information
In 2020, we're all dealing with extraordinary circumstances,
both in our daily lives and when it comes to our taxes.
The COVID-19 pandemic and efforts to reduce its transmission
and protect ourselves and our families means that,
for the most part, we're focusing on just getting through these trying days.
But life as we knew it before the coronavirus will return,
along with our mundane tax matters.
Here's hoping that happens soon!
In the meantime, you can find more on the virus and its effects on our taxes
by clicking Coronavirus (COVID-19) and Taxes.