The coronavirus outbreak has shifted a lot of plans, including those of the Internal Revenue Service (IRS). While the deadline to file tax returns and pay any taxes due would normally be April 15, in 2020 the due date, with some exceptions, is now July 15. How does the new tax deadline affect your business? You should be aware of some of the impacts you will see now and throughout the year.

Relief for Small Businesses

The federal government has initiated several programs for small businesses during the coronavirus outbreak. Since many businesses have had to close or are not allowed to continue operating, loans and grants have been made available through the Small Business Association (SBA).

If you are not able to make payroll for your employees, for example, you might be eligible for relief through the Paycheck Protection Program, a loan designed to provide a direct incentive for small businesses to keep your workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

IRS Changes

To provide additional relief for small businesses and individuals that may be struggling financially because of the COVID-19 pandemic, the IRS has extended several deadlines for tax filing and payment. The federal income tax filing due date for 2019 taxes has automatically been extended from April 15 to July 15, 2020. Tax payments that normally would have been due on April 15 can also be deferred. The IRS announcement includes a waiver of all penalties and interest on federal tax payments of up to $10 million for businesses that choose not to file until July 15, 2020.

This deferment applies to all taxpayers, including individuals, trusts and estates, corporations, and other non-corporate tax filers as well as those who pay self-employment tax. No forms or requests are necessary for the deferment to July 15. However, if you still need more time beyond the new deadline, given the current situation with your business, you must file Form 7004.

What Has Not Changed

At this time, the normal filing, payment, and deposit due dates continue to apply to both payroll and excise taxes for your business. Also, even though the first quarter estimated tax deadline has been postponed to July 15 as well, there is no change to the second quarter deadline. Your second quarter 2020 estimated income tax payments are still due on June 15, 2020.

Other deadlines that have not changed include those for partnership returns (form 1065) or S corporation returns (form 1120S) that were due on March 16, 2020. Essentially, any federal return due dates that were required to be filed by the March 16 deadline and any returns with filing or payment due dates other than April 15 will remain the same.

State Tax Returns

The IRS changes apply only to federal tax filings and payments. States have enacted their own revisions and extensions. Although most states have also extended the deadline to file state taxes, many are not able to suspend the interest charges that will be applied from the original deadline of April 15.

The state of Arizona has moved the deadline for filing and paying state income taxes from April 15 to July 15, 2020. The Arizona Department of Revenue extension applies to individual, corporate, and fiduciary tax returns. When you choose to delay filing your state tax return or submitting state tax payments until July 15, the state of Arizona will not assess late filing or late payment penalties. In addition, interest that may have normally accrued on payments owed will be waived.

CLEAR VIEW BUSINESS SOLUTIONS CAN HELP CLARIFY YOUR TAX PREPARATION

The new tax deadlines affect different businesses in different ways. At Clear View Business Solutions, we have the expertise and experience you need to help you determine how to best take advantage of COVID-19 relief efforts, including understanding more clearly how and when you need to file your federal and state returns. Proper tax preparation is critical for the success of your business. To learn more about improving your business’s chances of success at tax time and throughout the year, contact Clear View Business Solutions to speak to our team about our services. Give us a call at (520) 544-0177.