The world has been turned upside down as a result of the Coronavirus. The markets are down, Bitcoin has nose-dived in price but we're all trying to cope financially and that includes paying tax. After a few rumours of a potential extension, Treasury Secretary Steven Mnuchin announced on March 17th that the IRS will be waiving interest and penalty charges on tax payment for 90 days for Americans owing up to $1 million.
The $1 million figure has been chosen to cover pass-throughs and small businesses, an approach which Mnuchin says will provide tax relief for "virtually all Americans other than the superrich."
On March 21 this extension was broadened to include filing...
IR-2020-58, March 21, 2020 WASHINGTON — The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date is automatically extended from April 15, 2020, to July 15, 2020.
This means that the federal deadline for both income tax filing and income tax payments (regardless of amount owed) is now July 15 2020. It is advisable to check local state rules as these may differ.
The IRS is still encouraging all tax payers to report as soon as possible. This ensures that those eligible for refunds will not lose out and get them as soon as possible. The electronic system is considered the easiest and most effective method to file and currently doesn’t seem to be affected by the CV outbreak - the IRS is processing tax returns and paying out refunds without any notable delay.
We're all guilty of leaving stuff to the last minute but chances are right now you've more time than normal to go through your taxes. Whether you’re self isolating, working from home or if work’s just slow, your reporting for the previous year so the figures aren’t going to change. It’s worth getting this tedious admin side out of the way now, then your only left with the payment side of things closer to the deadline. Hopefully by then we'll all have a clearer financial vison.
If you know you are going to miss the deadline then you should still apply for an extension in the normal way. Extensions will be treated as normal - they will still be due October 15.
Got better things to do than your tax return in your free time? We’re with you – time is precious and it’s why we built Recap! We're putting the final touches to our US Tax support and this will be launching next week. Until then, US users can connect accounts and import data so when the new release drops all that's left to do is choose your cost basis method and we calculate your cryptocurrency gain/loss for you. You can download a ready to file report - its even appropriate for online tax engines like Turbo Tax.
Yeah, you still have to do a bit of work getting your data in but it takes a fraction of the time you'd normally spend and if your math is anything like mine its got to be much more reliable!
If you are worried about the effect the coronavirus outbreak might have on your financials but know you are due a tax refund then file asap. The IRS recommends e-filing and choosing direct deposit to get your refund as soon as possible; most who use this method receive their's within 21 days of submitting. At present there is nothing to suggest that this process is not running like clockwork, so get in there fast!
If you don’t pay your taxes after the 90 day extension period you will still face the normal penalties and interest. If you can afford to pay early it might be worth doing – just so it’s one thing crossed of your to do list. Let’s face it – you’ve probably got a bit of spare time on your hands right now and plenty of other things to stress about.
The Coronavirus is having a worldwide impact. There is a lot of uncertainty, with advice changing as often as hourly, regulators are having to react and adapt and provide help as the situation develops. It’s a worrying time financially but it should be comforting to know that you are not the only one with concerns; stay proactive and don’t let your situation spiral out of control.
Social distancing? Self isolation? C'mon, the crypto community have been at their keyboards doing this alone together thing for years. See you on the other side.