Dear Clients and Friends:
The tax delay news continues to pour in. Just moments ago, Secretary of the Treasury Steven Mnuchin, announced that the deadline for filing 2019 federal income tax has been pushed back to July 15, 2020 from the normal deadline of April 15, 2020. This conforms the filing deadline to the payment deadline which was extended a few days ago. Of course, that doesn't change our goal of getting out as soon as possible any returns that show overpayments that are to be refunded to a taxpayer. This is welcome relief to all of us who have been affected by the same issue of social distancing as the rest of the world. It will allow us to be able to allocate additional time to helping our clients with many matters affecting their economic existence other than taxes. We are here to answer your concerns and add calm guidance and suggestions to lessen your stress.
We do not have any word regarding Kentucky, Ohio, or local taxes. Indiana has announced that it will follow the new Federal deadlines for both filing and paying many of the taxes that would have been due on April 15. They did not announce any limits on amounts.
Also, you may remember that we mentioned in an earlier EBLAST that the IRS put a limit of $1 million on individual taxes that would be protected from interest and penalties. As it turns out, the $1 million limit applies to the aggregate of all taxes that would have been due on April 15. So, by way of example, if a taxpayer owes $800,000 additional tax on the taxpayer's 2019 federal return and also owes, say, $400,000 on the first quarter 2020 estimate, interest and penalty would be owed on $200,000 (i.e. $800,000 + $400,000 - $1,000,000) for the period of time after April 15, 2020. (Note that there are some technical issues regarding "interest" on late estimated tax payments which we are not addressing in this EBLAST.)
If there are further questions submitted that pertain to many of our clients, we will continue to address them in future communications.
