Steven Mnuchin, US Secretary of the Treasury. USA, speaks during a hearing of the Senate Small Business and Entrepreneurship Committee in Washington, DC, USA. USA, Wednesday June 10, 2020.
Al Drago | Bloomberg | fake pictures
This tax season may be more like a fiscal year as Treasury Secretary Steven Mnuchin considers delaying the July 15 deadline again.
“As of now, we don’t intend to do it, but it’s something we can consider,” he said in an interview on June 23 at the Bloomberg Invest Global 2020 virtual summit. He said he was considering another delay for September 15.
The Treasury has already pushed back the April 15 deadline for federal income tax returns to July 15, giving individuals and professionals some relief as they dealt with the coronavirus and orders to stay home in the spring.
On that day, federal income for 2019, as well as taxes owed, are due. The IRS also advanced a number of other deadlines, including first and second quarter taxes, until July 15.
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Please note that your state may have different deadlines.
For tax professionals, a further delay in the tax season would be a mixed blessing.
Accountants are rushing 2019 tax returns out the door, as well as dissecting the Paycheck Protection Program and all of its tax planning implications for small business customers.
The PPP, a federal forgivable loan program established by the CARES Act, has many moving parts, and the guidance for obtaining forgiveness continues to evolve.
“It is a trap,” said Joshua B. Standley, an agent enrolled with DKK Accounting in Duluth, Minnesota.
“There has been no downtime,” he said. “We have to keep up with accounting and payroll compliance, but now we are jumping from one side to the other.”
While it would help more time to process returns, especially as coronavirus cases begin to rise in multiple states, delaying the deadline too long could affect year-end planning and the 2021 tax season.
“What happens next year?” Standley asked. “Does it extend the date of 2021 now because people are still working on this?”
Don’t wait until July 15.
Getty Images | filadendron
Many Americans have already filed their tax returns. On June 12, the IRS received 136.5 million individual income tax returns, which is less than 144 million in the same period last year.
If your return is easy and you expect us to pay you back, please do so. The tax collector distributed an average tax refund of $ 2,767 as of June 12, according to the IRS.
“I would encourage all Americans, if you can apply, go ahead and do it, particularly if you think you have a refund,” Mnuchin told Bloomberg.
Taxpayers who do not believe they will turn in their documentation within the next three weeks can request an extension.
That would give them until October 15 to file the returns, but they will still have to pay the taxes due before July 15.
Last chance opportunities
Nor should you wait until July 15 to take advantage of tax saving opportunities. Here are some to put on your radar:
• Tax extenders. Every year, lawmakers must renew a tax exemption package. These cancellations include a $ 4,000 deduction for tuition and fees for your college student, and you don’t have to itemize your taxes to get this.
• Health savings accounts. People with high deductible health plans can save money in their health savings account and make it count for 2019.
You typically save in a tax-deductible or pre-tax HSA and make your money grow tax-free over time. If you use the income to cover qualified medical costs, you can do it tax free.
For 2019, the maximum contribution is $ 3,500 for individual coverage ($ 7,000 for family plans). Account holders who are 55 years old can contribute an additional $ 1,000.
• Individual retirement accounts. You have until July 15 to save up to $ 6,000 in your individual retirement account (plus $ 1,000 if you are 50 or older) and you have the 2019 contribution count.
Many savers can also claim a tax deduction for making that IRA contribution, based on their modified adjusted gross income for 2019, even if they had a retirement plan at work.