When is the Tax Day deadline in 2020?
The deadline for filing 2019 US federal taxes is July 15, 2020. Usually Tax Day is April 15, but the worldwide economic crisis that has followed the Coronavirus outbreak resulted in a pushing-back of the 2020 Tax Day deadline.
In any case, since Tax Season started with the turn of the New Year, by now you’ve hopefully taken some time to prepare the necessary documents for Tax Day 2020.
According to IRS data though, the truth of the matter is that roughly one-in-four Americans wait until the final two weeks of tax season to file (we’re only human!). Considering the fact that we’re given more than four months to put everything together, that statistic raises some red flags. Fortunately, it’s not too late! And even if you aren’t able to beat the tax return deadline 2020 offers, there are still solutions available at your disposal.
If you’re still wondering, “how do I prepare for Tax Day?”, don’t sweat it because you’re not ‘a-loan’. The 2020 tax deadline is upon us folks, there’s no avoiding it now. So be sure to follow these Tax Day tips, and don’t wait until the last minute next time!
6 tax tips for the July 2020 Tax Day deadline
In search of Tax Day tips? We break down the top 6 tax tips for 2020 for you just below. Make the most of these pointers in order to finish off tax season strongly.
- Use tax software
- File your taxes online
- Bundle your expenses
- Make the most of your IRA
- Get a Tax Day extension
- Check if you qualify for new Coronavirus tax credits
1. Tax software
Tax preparation software comes as a tremendous relief to taxpayers who are uncertain about how to go about filing on their own. One of the biggest perks is that many tax software companies offer free services that will help individuals who have very simple tax requirements complete their forms properly.
The higher-tier tax services offered by those companies come at a cost but are still cheaper than hiring a professional accountant to do your taxes. Take a few minutes to learn more about tax preparation software.
If you feel that a higher-tier tax filing software can help you, but the cost is a bit out of your range, consider business loans as a way to cover the expenses that are over your budget.
By using advanced algorithms, Become helps to increase business owners’ chances of obtaining funding, and also makes the business loan application process quick and easy.
2. File online
For individuals and businesses making less than $66,000 income, the IRS offers services that offer guidance on how to file taxes free of cost. For those taxpayers earning more than $66,000 annually, there are still useful services offered by the IRS to simplify the tax filing process. In any case, these resources will help reduce stress as we approach the tax return deadline 2020.
3. Bundle expenses
In anticipation of this fiscal year drawing to a close, one strategy you can use to save yourself some money is to spend as much as you can on tax-deductible expenses before the 2020 tax deadline. Yes, you read that correctly.
Instead of paying employees a bonus at the beginning of the year and waiting months for the tax deduction, you can bunch them together at the end of the year and benefit from the deductions you’ll get this year. The same is true for tax deductions for inventory – buy a few months’ worth of supplies before July Tax Day 2020 and save yourself a few bucks over the first months of the new fiscal year.
4. Make full use of your IRA
Making a contribution to your Individual Retirement Account (IRA) is probably the most popular method of making last-minute tax deductions. Qualifications for this tax deduction will depend on several factors, including marital status, income, and whether or not your employer is providing you with a retirement plan.
The bottom line is, the maximum IRA contribution allowed is $6,000 for individuals younger than 50 years of age, and $7,000 for taxpayers 50 years or older. If you haven’t been taking advantage of this deduction, you should get on the ball. You’re not getting any younger!
5. Get a Tax Day extension
Whether you were on vacation, preoccupied at work, or simply forgot to get prepared for Tax Day 2020, the IRS offers the option for taxpayers to request a 6-month extension. We’ll cover the process of how to apply for an extension on taxes further below. Suffice it to say that, if you’re in a time crunch for filing taxes, requesting an extension is something you’ll want to do.
6. Check if you qualify for new Coronavirus tax credits
The IRS has recently begun offering 3 new tax credits for businesses that can show they’ve been negatively impacted by coronavirus shutdowns.
Employee retention credit – designed to incentivize employers to retain employees. This credit is a 50% refund of up to $10,000 in payroll expenses. Most businesses and nonprofits are eligible, but not those that receive small business loans.
Paid sick leave credit – designed to give a break for employers that have employees who are unable to work because of quarantine. This credit is a 100% refund on a maximum of 80 hours at $511 per day per employee (max $5,110 per employee).
Family leave credit – designed to give a break for employers that have employees who are unable to work because they’re caring for a family member (for example, a sick relative or a child that doesn’t have childcare services available). This credit grants employers a 100% refund of up to $10,000 per employee over a period of 10 weeks (66% of the employee’s regular pay, up to $200 per day).
You can visit IRS.gov for details on how to apply.
Steps to Take Before Your Tax Preparation
So you’ve already postponed and procrastinated and now you’re finally ready to take a whack at filing taxes. Before you jump headlong into the thick of it, make sure you get prepared for what’s to come. Follow these four simple steps and avoid further delays in completing this important task.
Step-by-step guide for filing taxes for businesses:
- Gather documents
- Check which form is right
- Complete the form
- File on time
Let’s take a deeper look at each of the four steps to filing taxes for businesses.
1. Gather documents
Besides having your social security or tax ID number, you’ll need to have proof of transactions that have taken place throughout the year. Hopefully you have a system that you use to keep financial records organized. One useful tool to help simplify the bookkeeping process is Quickbooks, which brings all of your bookkeeping needs together on one intuitive dashboard.
Necessary tax documents may include:
- Credit card statements
- Records of checks written
- Mileage (for work-related travel)
- Home office expenses (if you work from home)
- Property tax receipts
- Charitable donation receipts
2. Check which form is right
With the multiplicity of tax forms that you may or may not need to fill, the process of figuring out which apply to you and your business can get dizzying. While it is absolutely necessary that you do your due diligence, here are the basic forms you’ll need for the three basic sorts of businesses:
- All individuals – Schedule E
- Sole proprietorship – Schedule C and Schedule SE
- Partnership – Schedule K-1
- LLC – Schedule C (if a single-member LLC), Schedule K-1 (if registered as a partnership) or Form 1120 (if registered as a corporation)
There are many different types of forms which may apply to you, so be sure to visit the IRS website to find out which you’ll need to fill so you don’t miss the business tax deadline for 2020 (more on that below).
3. Complete the form
You’ve gathered the necessary records and found out which forms you’ll need to fill – now you need to fill the form(s). Be sure to do so with care, because if you make an error on a form it can have a real impact on your eligibility to receive the tax returns you’re filing for. You’ve already had a late start to the race, try your best not to trip up on this step!
4. File on time
Different forms have different deadlines, so be sure to pay attention to those dates.
July 15th is the individual’s tax return deadline for 2020. But the business tax deadline 2020 may be different depending on the type of business it is.
For example, sole proprietorships will file the Schedule C jointly with the Schedule E, so the 15th of July Tax Day 2020 applies the same to them as it does to individual taxpayers.
On the other hand, if an LLC is registered as an S-corp then Tax Day 2020 is March 15th. To reiterate, each business owner should take a careful look at the IRS website to figure out which forms they need to fill, and what the deadlines are for those forms to be filed. Don’t be late to the party again!
What happens if you miss the Tax Day deadline?
Tax day tips are a dime a dozen, but the first and foremost rule you should set yourself is to make sure you file on time. Started preparing for Tax Day 2020 a little too late? Worried what sort of fees you might be facing as a result? Take a deep breath and relax. Even if you don’t file by the 2020 tax deadline it won’t be the end of the world – though there are consequences you need to be aware of.
Important: If you can show reasonable cause for failing to file or pay on time, you can avoid accruing the late penalties.
There are two penalties that the IRS may hand out to tardy taxpayers – one being a penalty for filing late and the other is a penalty for paying late.
Penalties for filing late: they range from a minimum of $205 to a maximum of 25% of the unpaid taxes. The penalties for paying late is generally 0.5% of the unpaid taxes per month up to a maximum of 25% of the total unpaid amount. If both penalties apply, the maximum fee is 5% per month.
If you find yourself in need of additional funding for your business, consider applying for an unsecured business loan. Unsecured business loans don’t require any form of collateral, which significantly reduces the amount of risk taken by the borrower.
If there isn’t enough time for you to complete the filing process before the tax return deadline 2020, you can still apply for a Tax Day extension.
How can businesses get a Tax Day extension?
For individuals or businesses who are unable to file their taxes on time, there is the option to request an extension on the 2020 tax deadline. Though the forms will differ, the process is fairly similar for individual taxpayers and businesses.
Steps to apply for a Tax Day extension:
- Approximate what you owe in taxes
- Download the proper form (Form 4868 for individuals, Form 7004 and/or Form 1138 for businesses and corporations)
- Fill the proper form
- Send the form
Keep in mind that there are special rules that may apply for taxpayers who anticipate filing or paying late because they are active military serving in a combat zone, or if they are simply living outside of the United States.
Is it too late to reduce your 2019 taxes?
Looking for last minute tax tips for 2020? Use these tricks to help reduce your 2019 taxes – it’s not too late!
Tax tips to increase deductions:
- Make sure you remember to file for returns on your insurance premiums, as they are 100% deductible. Don’t miss out on this opportunity to reduce the cost of ensuring your security.
- Interest payments on small business loans, business credit cards, and mortgages, unpleasant as they may be, are thankfully tax deductible as well.
- Contributions to a health savings account (HSA) are entirely tax deductible. This is a smart and responsible way to reduce taxes, as it offers you an important long-term benefit at the same time.
Ready, set… file!
You may have started reading this article wondering, “How do I prepare for Tax Day?” Fortunately, you now have plenty of information in your arsenal to make these last few days count as we approach the 2020 tax deadline. Feel free to share these pointers with anyone you know who can use these tax tips in 2020.
Also make sure to scratch up on small business tax hacks for the upcoming tax season starting January 1, 2020. You may be shrugging your shoulders thinking “I’ve got plenty of time”. But if you’re in a jam as we approach July Tax Day 2020, the only sensible way to proceed is to be ahead of the game for next year’s tax return deadline.
Best of luck, and happy filing!