What Do You Need to Know About the July 15 Tax Deadline?
2020 has been such a crazy year, and we’re only halfway through it. From the very beginning, small businesses knew this year was going to be different and present a wide variety of challenges that have never been seen before.
Now well into June, small businesses are being forced to dig deep and find a way to continue moving forward — despite a majority of these businesses dealing with being dealt a bad hand.
Although some will argue otherwise, the government has done a lot for small businesses and has given them a wide range of resources to help them through this mess. From small business loans to programs designed to provide instant relief, businesses are taking advantage of whatever they can.
One of the ways the government has helped is by extending the tax deadline, usually April 15 to July 15, effectively giving millions of taxpayers three months to file and pay off their small business tax return.
Why Was the Tax Deadline Pushed?
In case you’ve been under a rock for the past six months, we’ve been hit with a global pandemic that has affected virtually everyone around the world. As a result, the government has made several tough decisions that include social distancing guidelines and lockdowns across the United States.
Of course, we knew this would have an immediate effect on businesses. People weren’t working, which means people weren’t getting paid, which means people weren’t spending. It was a domino effect that immediately turned the worst-case scenario for many taxpayers.
With the economy taking a hit and businesses struggling to stay afloat, the government knew taxes were the last thing small business owners wanted to deal with — especially since most of them were trying to figure out how to operate during these difficult times.
An extra three months is far from being a one-size-fits-all solution but has given a majority of businesses hope and immediate relief.
Can You Still File an Extension?
If you’re still struggling to file a small business tax return before the July 15th tax deadline, you can still file for an extension. This extension will give you until October to file everything and send it to the IRS.
Unfortunately, your balance due will still be required by July 15 — even with an extension. If you can’t have the small business tax return filed in time, please make sure you can pay have the money owed.
What Happens If You Pay Late?
The good news is the federal government is allowing anyone to pay their taxes up to July 15, interest-free and without penalty. In addition to that, there are a variety of resources that will help you file for free — adding to the savings.
At the same time, you might incur a fee or penalty for paying after the July 15 tax deadline — even with an extension. This will typically be 0.5%-1.0% of the total tax bill, charged each month the taxes are unpaid. The amount will never exceed 25% of the tax bill.
If you need further assistance with your small business tax return in 2020 and would like to start preparing for your 2021 tax return, contact me today. I know 2021 tax returns are the last thing on your mind, but that’s why I’m here to take the load off your back!
References
Loudenback, Tanza. “Wednesday Is Supposed to Be Tax Day, but Now You Have an Extra 3 Months to File and Pay.” Business Insider, Business Insider, 15 Apr. 2020, www.businessinsider.com/personal-finance/july-15-new-tax-day-2020-what-you-should-know-2020-4.
Loudenback, Tanza. “The Deadline to File and Pay Your Federal Taxes Is July 15, 2020.” Business Insider, Business Insider, 2 June 2020, www.businessinsider.com/personal-finance/when-are-taxes-due-tax-filing-deadline.