Tax Reminder: What Small Businesses Need to Know About the July 15 Tax Deadline and After
CoAdvantage- April 15 has been Tax Day in the United States since 1955, varying only if the 15th falls on a Friday, Saturday, or Sunday. Even then, it only ever gets extended to April 18 at most.
But 2020 is certainly not like most years. This year, the Internal Revenue Service significantly extended tax deadlines in recognition of the hardships imposed by the COVID-19 pandemic on many U.S. taxpayers: “Most federal tax filing and payment deadlines from April 1, 2020, to July 14, 2020, are postponed to July 15, 2020. The postponements are automatic and apply to all taxpayers. You do not need to file other forms or call the IRS to qualify.”
What that means for you:
- If you would have normally filed taxes between April 15 and July 14, you must now file by July 15.
- If you would have normally owed taxes due on April 15, those taxes are now due until July 15.
- If you would have normally paid estimated taxes on April 15 and June 15, both deadlines have also been pushed to July 15.
- If you had previously filed an extension that pushed a prior deadline to within the April 15 to July 14 period, the new deadline is July 15 (in effect, your extension has been extended).
Businesses and taxpayers can still request a further extension if they are not ready to file by July 15. Per the IRS: “Taxpayers must request an extension to file by July 15. This gives them until October 15 to file their tax return. An extension to file is not an extension to pay. Taxes must be paid by July 15.”
In fact, it may be good business to consider an extension in some cases. The CARES Act, for example, included several retroactive tax relief provisions that businesses must decide whether to pursue. Future legislation with pandemic-related relief measures may similarly affect tax considerations. To determine if it makes sense to file an extension, contact your accountant or tax attorney.
Tax deadlines after July 15 are unchanged at this time. For example, second-quarter payroll taxes are still due by July 31, 2020, and quarterly estimated taxes will still be due again on September 15, 2020.
Similarly, any S-Corporation or partnership that filed for a six-month extension on their normal March 15 deadline will need to file a tax return by September 15, and any C-corporation or sole proprietorship that did the same will need to file a corporate tax return by October 15.
One important note: most previous tax obligations and issues are still at play. For example, a common issue for many employers is contractor versus employee misclassification. This is a perennial problem that can prompt IRS audits, with some business shutting down as a result. The fact that deadlines have been moved does not mean employers can take taxes any less seriously than before.
CoAdvantage, one of the nation’s largest Professional Employer Organizations (PEOs), helps small to mid-sized companies with HR administration, benefits, payroll, and compliance. To learn more about CoAdvantage’s ability to create a strategic HR function in your business that drives business growth potential, contact us today.