For individual taxpayers who filed an extension, the deadline to submit your final 2019 tax return is Thursday, October 15.
A few tips to remember:
? You can file your return any time before that date.
? If you?re due a refund, make sure you muse direct deposit to receive your refund.
? If you owe taxes, you can pay online from a checking or savings account at IRS Direct Pay.
? Pay any balance due as soon as possible to reduce interest and penalties for late payment (the deadline to pay for 2019 income taxes due was July 15, 2020).
? If you missed the deadline to request an extension (July 15, 2020), you should file and pay as soon as possible. This will help reduce your interest and any penalties you may receive.
Taxpayers who filed their income tax return this year after the original filing date of April 15, 2020 and were due a federal tax refund, may have noticed a little bit extra being refunded to them than they expected. With the revised filing date for 2019 being moved to July 15, 2020, interest is being paid on individual taxpayer refunds for tax returns that were filed and refunds that were issued in the period April 15, 2020 ? July 15, 2020.
The interest payment will be received separately from the original refund. Taxpayers that received their federal tax refund via direct deposit will receive their interest payment via direct deposit to the same account. Taxpayers that received their federal tax refund via check, will receive a second check paying them the interest due them with a notation on the check stating ?INT Amount?. The average refund amount is $18.
Any tax return filed earlier in the year and whose refund was issued prior to the original April 15, 2020 date will not receive interest on their refund.
With the pandemic impacting the economy to the extent it has for much of the year, millions of taxpayers found themselves collecting unemployment for the first time in their lives.
Although unemployment insurance (UI) is a government program helping taxpayers out of work (and includes the Pandemic Unemployment Assistance (PUA) many received in 2020), these payments received by taxpayers are not tax-free income but are subject to federal and state income taxes.
To help plan for the taxes owed on this income, taxpayers can voluntarily choose to have 10% of their periodic UI received withheld for federal income taxes. To set up withheld taxes, a taxpayer needs to provide a completed Form W-4 to the paying agency, instructing the payor to have the taxes withheld.
However, having 10% withheld for federal income taxes may not be enough withheld. If you are in a higher tax bracket (12%, 22%, 24% or higher), you may still be under withheld for federal taxes. In that case you should consider making quarterly estimated tax payments or having additional amounts withheld for taxes from your pay once employed again. And if you opted to have no taxes withheld from your unemployment benefits, then you should certainly consider paying quarterly estimated tax payments so that you don?t find yourself in too big of a tax hole next April.
Estimated tax payments can be submitted to the government by check with a payment voucher via mail, or payment can be submitted electronically online via the IRS website, link below:
From Guest Writer Brenda Loan Baker, Executive Coach, Fortune Management Northeast
On every social media platform you can find numerous memes about 2020 being the worst year ever. For most of us this lock-down has been going on since mid-March, seven months now. To some it seems like a lifetime.
Early on in the pandemic, people experienced fear, for themselves and their family. Most of us have never experienced something like this and the unknown can be overwhelming. As we continued in our lockdown we rode a roller coaster of emotions. Some made the time useful cleaning out closets and starting new exercise regimes. Others worked harder than they had ever before. Some trying to position their business and keep up with the whirlwind of information to determine what was allowed and best for their situation.
Whatever your ride thus far in the pandemic has been, most of us are hitting the ?covid wall?. A study published by Harvard University shows more than 90% of Americans are struggling emotionally as a result of the pandemic.
Take some steps to come out from behind the wall! Here are a few ideas.
- Create some structure to your days. Go to bed at the same time. Our psyche craves structure.
- Exercise ? count you daily steps, set a timer and walk up and down stairs or around the house, any movement is good movement.
- Be mindful of how long and how often you watch the news. It is repetitive and anxiety inducing.
- Remain Social, find ways to connect with others.
- Get creative and think outside the box to do the things you love that fill your tank. If you crave travel, virtual tours may fill some of the void.
- Take time to rest. This includes watching your work hours. Set boundaries when working from home.
- For those who are working through it, perhaps in healthcare, most of which face the overwhelm of backlogged patients and longer, full days, rest and ?filling the tank? become exponentially more important.
Try some of the things to reduce the overwhelm caused by this pandemic and these times. If you find yourself still struggling, reach out for help from someone you trust or a professional.
We do not know what is around the corner. In the meantime, do the things you can. Wear your mask, wash your hands, take care of your physical and mental health. Live in the present and try to find good in every day.
For a power coaching call to help you come out from behind your covid wall, email@example.com.
We are getting this question a lot from practice owners about the recent Trump Executive Order allowing employees to defer paying their Social Security taxes for the remainder of this year:
I wanted to know if we are obligated to withhold the payroll taxes for the employees.? I am not sure if this is mandatory. It was supposed to start September 1 of this year. Please advise what to do.?
And our response is:
No, there is no requirement that you help your employees defer this tax.? The whole thing is a lot of extra work to defer $1k or so of social security taxes into 2021. If an employee really needs this extra money right now, they should take advantage of this opportunity. Otherwise let?s stay the course.
A copy of our article originally posted on 8/31 is available at:?https://www.linkedin.com/pulse/trumps-executive-order-allowing-your-employees-defer-social-schwartz/.
Looking to help out various charitable organizations during these crazy times?
The IRS has made temporary changes to charitable contribution rates for 2020 tax returns. They have suspended the normal maximum allowable deductions capped at 60 percent of your Adjusted Gross Income (AGI) and now allow individuals to deduct qualified contributions of up to 100 percent of their AGI in 2020.
C-Corporations can deduct qualified contributions of up to 25 percent of its taxable income this year, up from just 10 percert of income in prior years.
Contributions that exceed that maximum allowable amount can carry over the excess to the next tax year. For 2020, a special rule is also in effect allowing enhanced deductions by businesses for contributions of food inventory for the care of the ill, needy or infants.
To qualify, your contribution(s) must be:
- a cash contribution;
- made to a qualifying organization;
- made during the calendar year 2020
To find out more, please visit their post at: https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contribution-deductions