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On March 18, the Internal Revenue Service provided clarification to special payment relief for individuals and businesses in response to the COVID-19 Outbreak.

For individual returns, income tax payment deadlines with a due date of April 15, 2020, are automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due.

This payment relief applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations, such as trusts or estates. The IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.

Tax Deadline Remains April 15

While taxpayers still have to file their taxes by April 15, 2020, the deadline to pay taxes has been extended by 90 days until July 15, 2020.

During a March 17th press conference regarding the coronavirus pandemic, U.S. Treasury Secretary Steven Mnuchin announced taxpayers will have an additional 90-days through July 15, 2020 to pay their taxes, penalty-free and interest-free. 

He said individual taxpayers can defer up to $1 million of tax payments and corporations up to $10 million in tax payments.

Zinner & Co. is proud to introduce our new 2020 tax season interns. We hope this snapshot of them will help you get to know them, as some of our clients will be receiving communications from our interns, as they will work on tax returns this season. 

One of the most common tax-related misconceptions is that filing a tax extension increases your risk of a tax audit. 

This longstanding myth is simply not true, as filing a tax extension can statistically decrease the risk of an audit.

In addition to statistically decreasing the risk of an audit, there is also one other benefit to extending a tax return.

Many individuals may think the time to plan for tax season occurs during the tax season, which occurs after their tax year has ended.

Unfortunately, this is often too late to make any adjustments, which may have benefited the taxpayer.  

Similarly, businesses can also fall into this line of thinking and fail to plan for tax season during their tax year.

Due to many changes in the tax law under numerous tax acts that have been implemented over the past decade, including delay in the issuance of tax forms needed to complete individual income tax returns, the compression of the tax preparation and filing season has become even more severe. 

The tax code is long and complicated and oftentimes, taxpayers do not know what deductions or credits are available, which means they cannot take advantage of possible savings.

With so many changes under the 2017 Tax Cuts and Jobs Act and the 2019 SECURE Act now in place, changes have been made regarding the deductibility of expenses that both business and individual taxpayers may not be aware of.

A new piece of legislation enacted in late December will help simplify the retirement system and help individuals increase their savings.

The “Setting Every Community Up for Retirement Enhancement” Act or SECURE Act, which was part of the Further Consolidated Appropriations Act of 2020 expands opportunities for individuals to increase their savings, and makes administrative simplifications to the retirement system.

Among the major changes for individuals are:

Current Law:

The Tax Cuts and Jobs Act of 2017 limits individual taxpayer's state and local tax (SALT), itemized deduction to $10,000 (including real estate taxes). The previous law allowed an unlimited deduction. This change may be detrimental to many individual taxpayers who relied heavily on these deductions in the past.

State Work-Arounds:

Some states have considered "work-arounds" to combat this limitation. Select states (California, Connecticut, Illinois, New York and New Jersey, thus far) have created state

For many individuals, September means it is time to look for a new car since the upcoming year’s automobile models are introduced.