March 26, 2020
Important tax updates – 2019/2020
Federal IRS Tax Payments:
On March 20th, in response to the ongoing COVID-19 pandemic, the IRS released Notice 2020-18, which postpones the Federal filing and payment deadline from April 15, 2020, to July 15, 2020. This relief applies to all individual returns, trusts, and corporations. This relief is automatic, taxpayers do not need to file any additional forms or call the IRS to qualify.
This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020.
Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020. You will automatically avoid interest and penalties on the taxes paid by July 15.
Individual taxpayers who need additional time to file beyond the July 15 deadline can request a filing extension by filing Form 4868 through their tax professional, tax software or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004.
Here are a few things to note in regard to the notice:
- There is no extension form to file for this three-month postponement.
- There is no limitation on the amount of payment that may be postponed.
- This Notice does not address the postponement of 2020 2nd quarter Federal estimated income taxes. These payments are still due June 15, 2020.
- Interest, penalties, and additions to tax for the Federal income taxes postponed will begin to accrue on July 16, 2020, on any unpaid balance.
NYS Tax Payments and Filing:
The NYS tax filing and tax payment deadline has also been extended from April 15th to July 15th, 2020 to match the Federal tax return guidelines.
IRA and HSA Contributions:
The Internal Revenue Service today has clarified that the deadline for making Individual Retirement Account and Health Savings Account contributions for the 2019 tax year has been extended to July 15, 2020.
The maximum amount you can contribute to an IRA for the 2019 tax year is $6,000 (plus a $1,000 catch-up contribution if you are age 50 or older). The maximum amount you can contribute to an HSA is $3,500 for individual coverage or $7,000 for family coverage (plus a $1,000 catch-up contribution per account). You have to have a qualifying high deductible health plan to open one of these triple tax-advantaged accounts.