What to do? What to ?
Let’s say for a moment that you are the sort of taxpayer that I like … organized, responsive, and doesn’t wait until the last minute to get me information (like a certain brother of mine).
Your returns have been completed and filed. The money you owe as well as your first quarter estimate were scheduled to be withdrawn from the bank automatically on April 15.
But now … you are following the news as the world as we know it is changing. You learned that last Friday, all income tax returns (please read caveat later in this article) and any payments due April 15, 2020 have now been postponed until July 15, 2020 as being due. But your money is going to be withdrawn April 15, 2020.
What to do, what to do?
If your automatic payment was scheduled as part of your tax return process, please know from the outset there is NOTHING YOUR PREPARER CAN DO TO CHANGE THIS. (I’m just trying to save myself from answering phone calls and e-mails here.)
YOU must call the US Treasury Financial Agent at 888-353-4537 at least two business days prior to the date the payment will be withdrawn. What will happen after that? I wish I knew.
You may have to mail in your payments using a check (in which case you may need a form). You may be able to schedule the payment using the Electronic Federal Tax Payment System (www.eftps.gov). At this point, I am not sure anyone knows what will happen when/if you reschedule a payment.
And remember, this applies not just to 2019 income tax payments, but to the estimates that are also due on April 15. NOTE: estimated payments due June 15 ARE NOT postponed (yet) until July 15. And any other type of FEDERAL tax that is due is not affected by this postponement. STATE taxes will have their own rules and you need to check in with your state to learn what is happening. (Alternatively, if you’re up for reading, you can look at this handy dandy chart that the AICPA has produced: https://www.aicpa.org/content/dam/aicpa/advocacy/tax/downloadabledocuments/coronavirus-state-filing-relief.pdf)
Remember I said “income tax returns” are postponed? Well since the due date for making IRA contributions coincides with the “normal” due date for your return (April 15), and that date now has been postponed, you do have until July 15 to make your IRA contribution for 2019. Same applies if you have a Health Savings or Archer Medical Savings account.
CAUTION: There are other returns that may be due by individuals, albeit not by many, such as Gift Tax Returns. These are NOT postponed until July 15 although you can complete a form to extends them. In fact, any other type of return, due on any other day, is not postponed and neither are related payments. The postponement is ONLY for INCOME TAX RETURNS and INCOME TAX PAYMENTS due April 15, 2020.
I know, clear as mud.
Need help understanding it better? firstname.lastname@example.org