IRS Will Move Tax Filing Deadline to July 15 as Coronavirus Spreads | CNBC
- The IRS will move the national income tax filing day ahead to July 15, three months after the normal deadline for Americans to send in their returns.
- The move announced by Treasury Secretary Steven Mnuchin is the latest in a series of highly unusual, emergency measures to deal with the financial fallout of the coronavirus pandemic.
- Mnuchin said the extension ordered by President Donald Trump will give “all taxpayers and business this additional time” to file returns and make tax payments “without interest or penalties.”
Read the full article here.
President Trump Signs COVID-19 Relief Package
The President signed the Families First Coronavirus Response Act on Wednesday evening.
This bill is in response to the coronavirus outbreak by providing paid sick leave and free testing, expanding food assistance and unemployment benefits and requiring employers with 500 or fewer employees to provide additional benefits.
The tax relief comes in the form of a payroll tax credit for Social Security taxes paid on qualified paid sick or family leave wages. Some of the items addressed in the bill are:
- The refundable credit equals 100% of qualified paid sick or family leave wages paid each calendar quarter. The credit is allowed against the employer portion of Social Security taxes and applies to amounts paid to employees who are sick or quarantined.
- The credit applies to a maximum wage of $511 per day. For employees caring for a family member affected by COVID-19, the credit covers up to $200 a day.
- Comparable credits apply to self-employed taxpayers against the self-employment tax. The credit covers 100% of a self-employed individual’s sick-leave equivalent amount, or 67% of the individual’s sick-leave equivalent amount if they are taking care of a sick family member or taking care of a child following the child’s school closing. The sick-leave equivalent amount is the lesser of average daily self-employment income, or $511 per day, to care for the self-employed individual, or $200 per day to care for a sick family member or child following a school closing.
- These rules apply only to days occurring during the period beginning on a date selected by the Secretary of the Treasury, which is during the 15-day period beginning on March 18, 2020, and ending on Dec 31, 2020.
This credit will be available when filing 2020 taxes next year. This bill did not include payroll tax cuts or any other direct payments; however, upcoming relief bills may include this type of stimulus. For more information, click here.
Fed Cuts Rates to Near Zero | AB Bernstein
The Fed took swift action Sunday evening, cutting its policy rate by a full percentage point to 0%–0.25%, pledging to purchase at least $700 billion in securities, and coordinating with other global central banks to maintain as much liquidity in the system as possible. The Fed is also working with banks to encourage lending.
How big of an action is this? It’s pretty close to the full extent of their policy tools. It shows how urgent they see this and how much they’re working to maintain stability and prevent the crisis from spilling into the financial sector.
What is their goal? The Fed knows they can’t fix the underlying issue of the demand shock associated with virus containment measures but are showing that they’ll do whatever they can to provide financial stability, giving Congress a chance to enact fiscal policies such as additional safety net spending and giving those policies the opportunity to work.
What happens next? The Fed can continue to do Quantitative Easing or take other alternative measures, but we’re wary of how well further monetary actions can address the issues here. In his press conference Sunday night, Fed Chairman Powell said this action will replace the meeting originally scheduled for this week. Importantly, he also said they do not see negative rates as an appropriate policy in the US.
Continue reading here.
COVID-19: Business Resource Webpage | Maryland Department of Commerce
The Maryland Department of Commerce in conjunction with the Maryland Department of Labor, the Maryland Department of Assessments and Taxation, and several other state agencies launched a new webpage this week dedicated to business resources during the Coronavirus (COVID-19) outbreak.
The webpage, available on the Maryland Business Express portal, features several resources available for business throughout the state, including guidelines for employers, fair labor standards, information on insurance claims, opportunities for financial assistance, tax questions, and more.
To find resources or learn more about how to keep yourself, your families, and your workers safe, please visit businessexpress.maryland.gov/coronavirus.
Effective in April – User Fees Increase for Offer in Compromise
The IRS has issued final regulations (T.D. 9894) that raise the user fee for offers in compromise from $186 to $205, effective for offers submitted after April 26, 2020. Offers based on doubt as to liability and offers from low-income taxpayers would continue to be exempt from a user fee.
Five Ways Taxpayers Can Pay Their Taxes | IRS
Paying taxes is not optional – it’s the law. Taxpayers do have options when it comes to how they pay their taxes. The IRS offers several easy ways to pay taxes. Taxpayers can pay online, by phone or with their mobile device using the IRS2Go app, just to name a few.
Some taxpayers must make quarterly estimated tax payments throughout the year. This includes sole proprietors, partners, and S corporation shareholders who expect to owe $1,000 or more when they file. Individuals who participate in the gig economy might also have to make estimated payments.
Here are five options for taxpayers who need to pay their taxes. They can:
- Pay when they e-file using their bank account, at no charge, using electronic funds withdrawal.
- Use IRS Direct Pay which allows taxpayers to pay electronically directly from their checking or savings account for free. They can choose to receive email notifications about their payments when they pay this way. Taxpayers should watch out for email schemes. IRS Direct Pay sends emails only to users who request the service.
- Pay using a payment processor by credit card, debit card or digital wallet options. Taxpayers can make these payments online, by phone or through the IRS2Go app.
- Make a cash payment at more than 7,000 participating retail stores nationwide. To pay with cash, visit IRS.gov and follow the instructions.
Pay over time by applying for an online payment agreement. Once the IRS accepts an agreement, the taxpayers can make their payment in monthly installments.
