I worked for over 30 years in my past life for the Internal Revenue Service, involved in the collection or management of collection activities in central Texas. With COVID-19 bringing almost all our daily activities to a halt, our tax obligation still exists. Here are a few tips to avoid trouble with the IRS after we get out of this virus mess.
Although IRS has stopped all in-person contacts, they made significant changes to some of their processes. Their web site, www.IRS.gov, discusses their People First Initiative with the goal of helping Americans. These changes began April 1st.
The most significant change is the filing due date now being July 15th instead of April 15th.
If you think you’ll owe income tax for 2019, then the sooner you put your return together, the sooner you’ll know how much you’ll owe, allowing you to make plans to pay it. If you can’t pay what you owe, file the tax return on the 15th to avoid the failure to file penalty.
Self-employed individuals are required to make four estimated tax payments to cover their current year taxes. For 2020, the first ES payment was due on April 15th, but that due date has been extended to July 15th. However, the ES payment due on June 15th has NOT been extended.
If you’re making monthly payments on a payment agreement, any payments due from April 1st through July 15th have been suspended but interest will continue to accrue on the unpaid balance. IRS will not default any payment agreements during this timeframe.
Dealing with the IRS is never pleasant but meeting deadlines and taking positive steps to file on time and to deal with any money owed will make your life a bit less stressful during this stressful time.