With the outbreak of Coronavirus in USA, social distancing, and the president declaring a state of emergency, most small businesses might be struggling to keep business as usual. Also, tax season! The automatic extension of Federal Income Tax Filing & Payment due date from 15th of April, 2020, to 15th of July, 2020, comes as a massive relief to most.
Regardless of the amount owed, taxpayers can defer federal income tax
payments due on the 15th of April, 2020, to 15th of July, 2020.
No penalties or interests will be levied in this window.
Who qualifies for this relief?
According to the IRS, this deferment applies to all taxpayers, which includes:
- Individual taxpayers
- Trusts and estates
- Other non-corporate tax filers
- Those paying self-employment tax
What you need to do to qualify for the relief?
Nothing. No need for additional forms and no need to call the IRS. Everybody qualifies for this automatic federal income tax filing and payment relief.
However, if you need more time, you can request a six-month extension to file returns, the same as every other year.
If you are an individual taxpayer, you can request for a filing extension by filling Form 4878 through your tax professional or tax software. Alternatively, DIY online - here.
If you’re a business owner, you must file Form 7004.
Things to keep in mind:
The agency has stated that the relaxation is only for federal income tax. “State filing and payment deadlines vary and are not always the same as the federal filing deadline.”
Check your state’s tax developments here.
It is, however, advisable to file your expenses as soon as possible in case you are due a refund.
According to the IRS, 52.7 million taxpayers have already received refunds as of the 6th of March. Most tax refunds continue to be issued within 21 days.
You can check https://www.irs.gov/coronavirus for continued updates on Coronavirus Tax Relief.
Amidst all the uncertainty that this pandemic has brought to businesses around the world, one thing continues to be certain - Compliance is key to quick refunds. Simple mistakes in your tax filing can have severe consequences from the IRS!
Here are a few common errors the IRS states tax payers make:
- Misspelled names
- Filing status errors
- Calculation mistakes
- Errors in figuring tax credits or deductions
- Incorrect bank account numbers
- Unsigned forms
- Electronic filing PIN errors
We know how to fix this. We have a solution that will enable continuous-compliance for you.
With Fyle, you never have to worry about manual data entry, matching, and verification, or compliance. We’ll do all your heavy lifting while you focus on the more pressing needs of your business and employees.
Are you interested to learn more about how Fyle can help you better your Business Continuity Plan (BCP)? Schedule a demo now!