The Treasury and IRS recently announced 2019 tax changes for individuals, self-employed and businesses in response to Coronavirus (COVID-19).
The federal tax filing deadline has been extended to July 15, 2020. Taxpayers getting a refund are encouraged to file their taxes now to get their money.
If you’re self-employed or own a small business, you might be wondering what these recent announcements mean to you. We’ve got you covered with a summary of some o important things to keep in mind, below.
Refunds Will Continue to be Processed as Normal
While the federal tax filing deadline was extended to July 15, 2020, for all taxpayers, the IRS expects to continue to process refunds as normal. Last tax season, close to 72% of taxpayers received a tax refund close to $3,000, which for many taxpayers is their largest paycheck of the year. The IRS typically issues nine out of 10 tax refunds within 21 days or less from acceptance with e-file and direct deposit – the fastest way to get your refund.
Extensions for Self-Employed and Businesses with Tax Payments Due
The Treasury and IRS announced the deferment of federal tax payments, interest free and penalty free, for 90 days, until July 15 regardless of the amount owed. This deferment also applies to tax year 2020 estimated tax payments previously due on April 15, 2020.
Extension for First Quarter 2020 Estimated Tax Payments
If you file quarterly estimated taxes, some good news. The first quarter 2020 estimated income tax payments have been extended from April 15 to July 15, 2020. However, the second quarter 2020 estimated income tax payments are still due June 15, 2020, per IRS guidance.
First Quarter 2020 Estimated Tax Payment Deadline
- Original Date: April 15, 2020
- New Date: July 15, 2020
Second Quarter 2020 Estimated Tax Payment Deadline
- Unchanged Date: June 15, 2020
Third Quarter 2020 Estimated Tax Payment Deadline
- Unchanged Date: September 15, 2020
Fourth Quarter 2020 Estimated Tax Deadline
- Unchanged Date: January 15, 2021
Tax Relief for Self-Employed and Small Businesses Under the Families First Coronavirus Response Act
The Families First Coronavirus Response First Act, which was passed March 18, provides relief in the form of refundable tax credits for sick leave and family leave for both eligible self-employed and small business owners.
- Self-Employed Tax Credit for Sick Leave. If you are self-employed, you may be eligible for a refundable tax credit equivalent to a qualified sick leave amount. Qualified sick leave is based on your average daily self-employment income.
- Self-Employed Tax Credit for Family Leave. If you are self-employed you may be eligible for a refundable tax credit equal to 100 percent of a qualified family leave equivalent amount for eligible self-employed individuals.
- Small Business Tax Credit for Paid Sick Leave. If you are a small business owner and paid sick leave wages to your employees you may be eligible for a refundable tax credit equal to 100 percent of qualified sick leave paid.
- Small Business Tax Credit for Paid Family Leave. If you are a small business owner and paid qualified family leave wages to employees, you may be eligible for a refundable tax credit equal to 100 percent of qualified family leave wages paid.
TurboTax Has You Covered
TurboTax has you covered with the most up-to-date information regarding new legislation and tax filing changes and announcements in response to COVID-19. If you still have questions, you can connect live via one-way video from the comfort of home to a TurboTax Live Self-Employed CPA or Enrolled Agent with an average 15 years experience to get your tax questions answered. TurboTax Live Self-Employed CPAs and Enrolled Agents are available in English and Spanish and can even review, sign and file your tax return.
You can find the latest information on the tax changes and announcements in response to COVID-19, here.