Posts by Peters & Associates Staff

IRS Changes Tax Filing Day From April 15th to May 17th

WASHINGTON — The Treasury Department and Internal Revenue Service announced that the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021. The IRS will be providing formal guidance in the coming days.

“This continues to be a tough time for many people, and the IRS wants to continue to do everything possible to help taxpayers navigate the unusual circumstances related to the pandemic, while also working on important tax administration responsibilities,” said IRS Commissioner Chuck Rettig. “Even with the new deadline, we urge taxpayers to consider filing as soon as possible, especially those who are owed refunds. Filing electronically with direct deposit is the quickest way to get refunds, and it can help some taxpayers more quickly receive any remaining stimulus payments they may be entitled to.”

Individual taxpayers can also postpone federal income tax payments for the 2020 tax year due on April 15, 2021, to May 17, 2021, without penalties and interest, regardless of the amount owed. This postponement applies to individual taxpayers, including individuals who pay self-employment tax. Penalties, interest and additions to tax will begin to accrue on any remaining unpaid balances as of May 17, 2021. Individual taxpayers will automatically avoid interest and penalties on the taxes paid by May 17.

Individual taxpayers do not need to file any forms or call the IRS to qualify for this automatic federal tax filing and payment relief. Individual taxpayers who need additional time to file beyond the May 17 deadline can request a filing extension until Oct. 15 by filing Form 4868 through their tax professional, tax software or using the Free File link on Filing Form 4868 gives taxpayers until October 15 to file their 2020 tax return but does not grant an extension of time to pay taxes due. Taxpayers should pay their federal income tax due by May 17, 2021, to avoid interest and penalties.

The IRS urges taxpayers who are due a refund to file as soon as possible. Most tax refunds associated with e-filed returns are issued within 21 days.

This relief does not apply to estimated tax payments that are due on April 15, 2021. These payments are still due on April 15. Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments. In general, estimated tax payments are made quarterly to the IRS by people whose income isn’t subject to income tax withholding, including self-employment income, interest, dividends, alimony or rental income. Most taxpayers automatically have their taxes withheld from their paychecks and submitted to the IRS by their employer.

State tax returns

The federal tax filing deadline postponement to May 17, 2021, only applies to individual federal income returns and tax (including tax on self-employment income) payments otherwise due April 15, 2021, not state tax payments or deposits or payments of any other type of federal tax. Taxpayers also will need to file income tax returns in 42 states plus the District of Columbia. State filing and payment deadlines vary and are not always the same as the federal filing deadline. The IRS urges taxpayers to check with their state tax agencies for those details.


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Coronavirus Relief Bill

The Congress has passed a $2 trillion coronavirus relief bill intended to keep businesses and individuals afloat during this unprecedented time when most of America is on hold. The bill is being sent to the President for his signature.

The legislation includes direct payments to individuals, an expansion of unemployment insurance, billions of dollars in aid to businesses large and small, and significant funding for the healthcare industry.

Here, in broad strokes, are some of the main features of the bill:

1. It creates the Paycheck Protection Loan Program, with a price tag of $349 billion, which greatly expands the eligibility of businesses suffering as a result of the COVID-19 pandemic for SBA loans. The program will allow businesses to borrow money for expenses such as (i) payroll, (ii) continuation of health care benefits, (iii) mortgage interest obligations, (iv) rent and utilities, and (v) interest on debt incurred before the “covered period”, which is February 15, 2020, through June 30, 2020. Eligible businesses include non-profits and physician practices. The loans can be forgiven through a process that incentivizes businesses to retain employees. It also raises the maximum amount for such a loan by 2.5 times the business’s average total monthly payroll costs, up to $10 million. The interest rate on loans may not exceed 4%.
2. It calls for a payment of $1,200 to Americans making $75,000 or less ($150,000 for couples filing joint returns and $112,500 for heads of household) and $500 for each child, to be paid “as rapidly as possible.”
3. It provides relief funds of $130 billion for the medical and hospital industries, including funds for medical supplies and drug and device shortages, and expands Medicare telehealth services, including those unrelated to treatment for COVID-19.
4. It enlarges eligibility for unemployment insurance and provides an additional $600 per week on top of the unemployment amount customarily available under state law.
5. It authorizes up to $500 billion worth of loans and loan guarantees to eligible businesses, states and municipalities for wages, salaries and benefits, including $46 billion reserved for passenger air carriers ($25 billion), air cargo carriers ($4 billion) and businesses important to maintaining national security ($17 billion) and a $454 billion credit facility for programs designed to support lending to eligible businesses, states and municipalities. Businesses receiving loans through these programs will be prohibited from paying dividends or repurchasing stock or other outstanding equity interests while the loan or loan guarantee is outstanding and for 12 months following repayment.
6. It loosens the limitations of the Defense Production Act of 1950, allowing the government to correct a “shortfall” in “industrial resources” for two years from the date of enactment, without regard to the current $50 million spending limit.
7. It allows the Secretary of the Treasury to make loans or loan guarantees to eligible businesses, states, and municipalities and relaxes certain regulations imposed by prior legislation, such as the Dodd-Frank Act and the Economic Stabilization Act of 2008.
8. It provides temporary relief for federal student loan borrowers, deferring student loan payments through September 30, 2020, without penalty to the borrower for all federally owned loans, which applies to approximately 95% of student loan borrowers.
9. It prohibits foreclosures on all federally-backed mortgage loans for 60 days starting March 18, 2020, and provides up to 180 days of forbearance for borrowers of a federally-backed mortgage loan who have experienced a financial hardship related to COVID-19.

In addition, the Senate passed supplemental appropriations to help the government respond to the COVID-19 pandemic, which includes the following:

• $9.5 billion to support agricultural producers impacted by COVID-19, including livestock producers, producers of specialty crops and producers that supply local food systems.

• $8.8 billion in additional funding for Child Nutrition Programs, for food purchases and demonstration projects for schools.

• $80 million to the FDA to support the development of medical countermeasures and vaccines, advance domestic manufacturing of medical products and monitor medical product supply chains.

• $25 million for the Distance Learning, Telemedicine and Broadband Program, to support access by rural communities to telecommunications-enabled information and audio and video equipment, and advanced technologies for students, teachers, and medical professionals.

• $20 million to increase the lending authority available through the Rural Business Cooperative Service, to provide financing to business owners who might not qualify for a loan on their own.

If you have any questions or would like more information on the issues discussed in this communication, please contact any member of our team.

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Tax Filing Deadline Extended

The Treasury Department and Internal Revenue Service announced that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.

Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-­employment tax.

Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing payment and relief.

The New York State tax deadline has also been postponed to match the federal extension.

As your trusted professionals, we will keep you informed of any future tax updates as they arise.

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COVID-19 Client Meetings and Document Sharing Update

At Peters & Associates, CPAs, P.C. the health and safety of our clients, our staff, and our communities is our top priority. We are taking appropriate precautions and have implemented a plan for continuing operations within the Centers for Disease Control and Prevention (CDC) and state and local officials’ recommended guidelines.

Client Meetings and Document Sharing

Our firm has invested in the technology required to meet our client’s needs without regard to a physical location. At this time, we are asking you to utilize alternatives to in-person meetings and are prohibiting all face-to-face meetings. We have the tools necessary to arrange for virtual meetings and file sharing.

Ways to safely and securely share information:

· OneDrive for emails

· Postal service

· Faxing at 315.476.0417

Effective immediately, we will be mailing returns and ask you to use one of our secure file sharing methods above. If you must drop information or documents off to the office, we have a designated area for this outside our lobby on the 4th floor. Please knock on our door and leave, we will immediately pick it up.

Our Internal Plan and Protocols

Our firm’s continuity plan ensures both operational effectiveness and safety. For the near term, we are prohibiting international, domestic and inter-office travel, and enforcing healthy hygiene habits and social distancing.

Our Commitment

Peters & Associates, CPAs, P.C. is confident in our ability to provide essential services while following safety precautions and guidelines. This situation remains fluid and our firm is prepared to alter operations at any time. We are also continuously monitoring any changes to the tax deadline or filing requirements and we will keep you informed.

We know that by working together we can minimize the impact of this crisis. If you have any questions about our policies and how they may affect you, please don’t hesitate to contact your professional advisor at the firm. Thank you for your confidence and trust in Peters & Associates, CPAs, P.C.

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