Taxes in July - What You Need to Know
In response to the coronavirus pandemic, the Treasury Department and Internal Revenue Service announced all taxpayers, whether you owe taxes or are expecting refund, have been given an extension on the federal income tax filing due date.
Here is what you need to know.
New Tax Deadline
Federal income tax filing and payments, and other tax deadlines for 2019 (.pdf), are now due July 15, 2020, without penalties and interest, regardless of the amount owed, including individuals, trusts and estates, corporations, non-corporations and those who pay self-employment tax. If you are required to file a state tax return as well, all states have extended their filing deadlines. You will want to check with your respective state to verify the new deadline. Be sure to consult with your tax professional.
Filing Sooner Rather Than Later
The Internal Revenue Service (IRS) is open and processing electronic tax returns only and issuing refunds and processing electronic tax returns only and issuing refunds, so the sooner you file, the sooner you will get your refund if you are owed one. Most tax refunds are issued within three weeks. Your tax refund does not affect your coronavirus stimulus payment, if you're eligible. If you have a tax liability to pay, you can file your return now with your payment due by the July 15 deadline. Visit the BECU Tax Center for information and resources to help you file your taxes.
According to the IRS, individual taxpayers and business can automatically qualify for the July 15 extension, so you don't need to contact the IRS. If you need an extension beyond July 15, you can use the IRS free-file service to file Form 4868 (.pdf) for individuals or Form 7004 (.pdf) for business and corporations. The IRS states that even after filling out Form 4868 or Form 7004, you still have to pay your estimated taxes by July 15, 2020 to avoid penalties. Please consult your tax professional. Visit the IRS site if you need an extension of time to file taxes.
Because the due date for filing federal income tax returns has been postponed to July 15, 2020, the deadline for making contributions to an IRA for 2019 is also extended to July 15, 2020. The CARES Act temporarily waives required minimum distributions (RMDs) from qualified retirement plans and IRAs for the calendar year 2020. Additionally, it also waives the 10 percent early withdrawal penalty on distributions up to $100,000 taken before a plan participant attains age 59 1/2.
Member Savings on TurboTax
Filing your taxes online this year? You can save up to $20 on TurboTax with your member discount. You can find all of the details here.
The above information is intended to provide generalized information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.