What Does COVID-19 Mean for Your Taxes?

By now, I’m sure, you’ve heard that the federal government has postponed the deadline for filing your 2019 tax return and paying any tax owed, moving it from April 15 to July 15. This gave me and my team, as I’m sure it did you, a huge sense of relief as we all grapple with the more pressing crisis we all face: COVID-19 and the havoc it continues to wreak on our nation. Your top priority should be keeping yourself and your family safe and healthy.

Rest assured that you don’t have to do anything — no filing of any extension paperwork — in order to take advantage of this new deadline.

Note that this also new deadline also applies to the first installment of estimated tax payments for the first quarter of 2020 — that payment deadline has also been moved from April 15 to July 15.

However, you may be wondering about COVID-19’s impact on certain other deadlines and business or tax-related transactions, particularly at the state level. Here’s some important information for you to be aware of:

No change to Q2 federal estimated tax payment deadline: While the Q1 deadline has been pushed to July, what you may not realize is that at the time of this writing, the June 15 deadline for sending Q2 estimated tax payments has NOT yet changed. You should still plan to submit this estimated payment in June, with the Q1 payment due a month later.

Change to IRA and HSA contributions: There has been an adjustment to the April 15 deadline for making contributions to Traditional and Roth IRAs or Health Savings Accounts (HSAs) for 2019. If you plan to make contributions that count toward 2019, you must do this by July 15.

Depending on the state where you live and do business, you’ll need to take the following state-level information into account as well:

If you do business in Nevada… you file no state income tax, but take note that the Department of Taxation in the state is fully closed due to COVID-19. Taxpayers are advised to file and pay their taxes (this primarily applies to sales tax) through its online portal or by mail. Business license renewals have undergone no COVID-19-related changes; you should plan to renew through the Nevada Secretary of State’s online business portal, SilverFlume.

If you do business in California… you should know that the Franchise Tax Board (FTB) has postponed the filing and payment deadlines for all individuals and business entities to July 15. This applies to the following:

  • 2019 tax returns
  • 2019 tax return payments
  • 2020 Q1 and Q2 estimated payments (*Note: Remember, the federal Q2 deadline of June 15 is still in place as of today).
  • 2020 LLC taxes and fees ($800 LLC payments)

If you are an employer whose business has been affected by COVID-19, you may request an extension, in writing, of up to 60 days from the California Employment Development Department to file your state payroll reports and/or deposit payroll taxes without penalty or interest. This written request must be received within 60 days of the original delinquent date of payment or return.

Although the Ludmila CPA team are all working from home as we ride out the COVID-19 crisis safely, we want you to know that we are working. We’re available to assist you with filing returns, answering your questions, sharing financial advice, and providing peace of mind in this difficult time. Don’t hesitate to contact us with your questions or concerns.

A final word: If COVID-19 teaches us anything, it’s that nothing is more important than our health and well-being. Be present with your family, take care of yourself, and know that we’ll all get through this. Hang in there, and please let us know if we can help.