The Coronavirus COVID-19 pandemic has uprooted so many of our daily and yearly routines. While federal income tax deadlines typically fall on April 15, 2020, you may be wondering how the pandemic is affecting deadlines for taxes in 2020. Can you delay filing your yearly or quarterly taxes?
Treasury Secretary Announces Filing Extensions
In March of 2020, the U.S. Department of the Treasury and the Internal Revenue Service announced 90-day extensions for tax filing and payments. "In an effort to relieve taxpayers during these challenging times, Treasury and the IRS are extending tax deadlines for fiscal year businesses, tax-exempt organizations, and more than 270 other tax-related deadlines," said Secretary Steven T. Mnuchin. The announcement postpones tax returns and payments for tax-exempt and fiscal year businesses due between April and June until July 15, 2020.
The IRS also extended deadlines for estate and gift taxes, which are generally due within nine months from the date of death. The agency also extended all administrative deadlines for individual taxpayers 270 days, to July 15, 2020. No penalties or interest will accrue between April 15 and July 15, 2020.
Should I Delay My Federal Tax Filings or Payments?
While the IRS and Treasury deadlines can be helpful to many people who owe quarterly or yearly taxes, you should consider your personal tax liabilities before deciding whether to delay your tax filing. If you owe taxes for 2019 or quarters 1 and 2 in 2020, you do not have to pay until July 15, 2020. You can also request an extension to file until October 15, 2020, although interest and penalties may apply if you do not estimate and pay your taxes by the July 15, 2020 deadline.
If you are expecting a refund from the federal government, you shouldn't delay filing your taxes. The IRS is accepting and processing federal income tax returns and encourages you to file electronically to receive a direct deposit as soon as possible.
How Does the Extension Affect Maryland Taxes?
Following the federal government's lead, the Maryland Comptroller's Office also extended tax deadlines to July 15, 2020. Individual income tax state returns and payments are due on July 15, 2020, as well as business-related tax returns and any payments not yet collected by Maryland in March, April, May, and June of 2020. The deferment applies to all individual income taxpayers, trusts and estates, corporate and non-corporate filers, and those who pay self-employment taxes. Maryland will not impose interest or penalties on 2019 and quarter one and two tax payments if made by July 15, 2020.
As with federal income tax refunds, if you expect to receive a refund from the state of Maryland, you should not delay filing. You should file as soon as possible to receive your refund as quickly as possible.
Contact Gabaie & Associates, LLC for a free consultation about federal or Maryland income tax filings. We're here to help you determine the tax implications of any changes in your income during this trying time. You can also call us at (410) 862-2198.