Tax Extension

Tax Extension

In response to the COVID-19 pandemic, Treasury Secretary Steven Mnuchin announced yesterday that individuals can defer April 15th tax payments up to $1 million, and Corporations can defer up to $10 million of tax payments, for 90 days.  Please note that many details remain unclear with respect to this relief, and no official written policy has been released yet, but we expect additional guidance from the IRS in the coming days and will provide details once available.  For now, here is an overview of what to expect:

  • Tax payments due April 15th can be deferred until July 15th without incurring any interest or penalties.  This extension is available for all individual taxpayers who owe < $1 million for 2019.
  • This 90-day extension of time to pay will likely also apply to 1st and 2nd quarter 2020 estimated tax payments due April 15th and June 15th respectively.
  • Mnuchin’s statement did not extend the tax filing due date, so all taxpayers must still file their tax returns or request extensions (Form 4868 automatically extends the filing deadline to October 15th) by April 15th.
  • For anyone that anticipates a refund for 2019 taxes, as usual we recommend you go ahead and file by April 15th, if not sooner, to have that money refunded.

“We encourage those Americans who can file their taxes to continue to file their taxes by April 15,” Mnuchin said, especially encouraging people who will be getting tax refunds to do so. “Just file your taxes,” he said, and “you will automatically not get charged interest and penalties” on payments made within the 90-day deferral period.

We are following the Families First Coronavirus Response Act (FFCRA) closely, which will address relief in the form of tax credits and/or cash payments to businesses and employees affected by COVID-19 and will send an update once there is an agreement. For our business owners, we are also closely monitoring federal and state incentives (including low interest loans, grants, unemployment for employees, etc.) and will send details and guidelines once available.

The SECURE ACT

The SECURE ACT

The final weeks of 2019 brought the second major piece of tax legislation in the past 24 months, as the SECURE Act (The Setting Every Community Up for Retirement Enhancement Act), which was passed in the House over the summer, finally made its way through the Senate and was signed into law by the President. The legislation may have significant repercussions for individuals engaged in retirement and estate planning.

Attached we have highlighted the key provisions