For guidance on tax returns and estimated taxes on stock compensation (stock options, restricted stock/RSUs, ESPPs, and SARs) see the Tax Center at myStockOptions.com. On top of that, he foresees “a huge number of self-employed service industry workers who are going to have a large IRS balance due when they file their 2020 returns.”, Beth Logan, EA, who works with Kozlog Tax Advisers and is the President of the Massachusetts Society of Enrolled Agents, described to me another type of problematic situation.
Opinions expressed by Forbes Contributors are their own. When you “can determine with reasonable accuracy that they’ll be entitled to a substantial credit on their 2020 tax returns,” she explained, “I reduce their estimated-tax payments by the expected economic impact payment” (EIP). Mnuchin has said the delay would free $300 billion of liquidity in the economy as individuals and businesses have more time to address short-term cash-flow issues if they can delay their tax payments. I make the law and the tax code understandable to everyone, Impact 50: Investors Seeking Profit — And Pushing For Change, Tax Return Extensions: 8 Key Things To Know In 2020, IRS’s Economic Impact Payment Information Center, Pandemic Emergency Unemployment Compensation, you owe less than $1,000 in tax for the year, you pay at least 90% of tax owed for the current year (2020), or 100% of the tax you paid for the prior year (2019), whichever is smaller, ongoing financial hardship from the coronavirus pandemic. My sources at the IRS tell me that changes in the safe harbor percentages for 2020 will “probably be considered.” However, they also say that right now it’s likely to be “at the bottom of the pile,” given all the other issues demanding immediate attention at the Treasury Department and the IRS.
COVID-19 has prompted a delay in the IRS tax-return deadline from April 15 to July 15. She does this for taxpayers who were not eligible for a credit on either 2018 or 2019 income but probably will be on 2020 income. Hopefully that will be clarified too. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.”. You are required to pay estimated income tax if the tax shown due on your return, reduced by your North Carolina tax withheld and allowable tax credits, is $1,000 or more regardless of the amount of income you have that is not subject to withholding. Trump’s Jobs Record Fell Short of Promises Even Before the V... GOP Loses Suit to Restrict Mail-In Voting in Biden’s Home St... Sheikh Sabah, Kuwaiti Leader Who Tried to Heal Rifts, Dies a... Zimbabwe Asked by U.S. to Help Fight Militants in Mozambique, Spain Ends Furlough Uncertainty With Last-Minute Extension. Elliott Puretz, a CPA, tax-return preparer, and retired college accounting professor in the Boston area, told me that for now “you have to assume the deduction will not be allowed.”. Before it's here, it's on the Bloomberg Terminal. I’ve devoted most of my professional career to making complex legal and tax concepts understandable to people who do not enjoy reading the Internal Revenue Code or the US securities laws. In updadted guidance issued April 9, 2020, the IRS said that if you owe 2019 taxes to the IRS, or estimated Q1 or Q2 2020 taxes, no payment is due until July 15. For those who pay estimated taxes, 2020 presents special issues and potential hardships. We usually don't go back more than the last six years.” The date used is typically April 15, or later if an extension was filed. a home-equity loan), you may want use that to make the estimated-tax payments.” However, if your only funding source for taxes is a credit-card advance, presumably with a much higher interest rate than the rate of the IRS penalty, then it makes sense “to consider not paying the estimated-tax payments.”.