What You Need to Know About Filing Your Taxes This Year

image_pdfimage_print

Federal income tax was introduced with the passage of the Revenue Act in 1861. The year 1913 marked the first time federal income tax filings were required with the filing deadline of March 1st, 1913. In 1918, the filing deadline was changed to March 15, 1918 and in 1955 it was changed again to April 15, 1955. Since 1955, the individual tax filing deadline has not changed until the United States Treasury’s recent announcement to extend the April 15, 2020 filing deadline to July 15, 2020. So what does this announcement mean for you?

FEDERAL FILING DEADLINE

The announcement means that you have until July 15, 2020 to file your personal/individual tax return for tax period 2019. Here, we are generally referring to persons filing Internal Revenue Form (IRS) 1040 or some version of the 1040 Form. For example, this would include disregarded/single member LLC’s and sole properties or schedule C filers.

FEDERAL PAYMENT DEADLINE

The announcement also means that if on July 15, 2020 or before, you have prepared your personal/ individual tax return for tax period 2019 and you have determined you have a tax liability (you owe); you must submit your payment on July 15, 2020. The lesson here is to try and prepare your taxes early to determine your disposition. Don’t procrastinate!

FEDERAL FILING DEADLINE EXTENSION

If for some reason you cannot file your 2019 federal income tax return by July 15, 2020 file an extension using IRS Form 4868 by July 15, 2020. Your extension must be postmarked or filed electronically July 15, 2020. The extension will provide you with time to file your return by October 15, 2020.

FAILURE TO FILE and FAILURE TO PAY

I could spend the next few weeks explaining IRC (Internal Revenue Code) Section 6651, but that would be too exciting. Therefore I’m giving you “the skinny” on it. If you can’t file by July 15, 2020 file an extension for….sake! If you owe and don’t have the money to pay, file your tax return anyway for….sake! Why? There are two penalties the IRS will assess if you fail to act.

One penalty is for the failure to file and the other is for the failure to pay. If the deadline comes and you fail to file your return, or an extension (IRS Form 4868) and you owe you will be assessed a penalty of 5% up to 25% of the liability (the amount you owe). Yikes! Additionally, if you owe, don’t have the money and fail to file your prepared or completed return you will be assessed a fail to pay penalty of 5% up to 25% of your tax liability. Yes! That’s right! Between the failure to file your return or an extension AND the failure to pay you could wind up increasing your potential tax liability by an additional 10-45% due to interest and penalties.

STATE DEADLINE

Most states if not all, have adopted the federal deadline for filing your tax returns. For example, the state of Maryland has changed their filing and payment dates to those of the Internal Revenue Service. Check with your local jurisdictions for further details.

They say the only sure thing in life are death and taxes. But where there is income tax the just man will pay more than the unjust man, on the same amount.

Connect with us at: Ruthven@give2getrich.com

More from Ruthven Phillip

Virus Economics: How to Spend Your Stimulus Check

Pandemic viruses are the mother of invention. Think about it! Within two...
Read More

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.