We hope that everyone is doing well! We wanted to remind everyone of the important tax deadlines coming up along with a few other updates to recent legislation.
September 15th Deadline for S Corporations, Partnerships, and Third Quarter Estimated Payments
The extended due date for S Corporation and Partnership tax returns is September 15th, 2020. If you still need assistance with preparing your business income tax returns for 2019, please let us know. We request documents and payment be submitted by September 1st to ensure there is enough time to file your return on time.
September 15, 2020 is also the due date for Individuals to make their federal estimated tax payment for the third quarter. If we prepared your 2019 income tax return the vouchers based on the prior year safe harbor were included in your final tax return package. If you need us to resend the vouchers please let us know. If you would like assistance calculating a payment using your 2020 income, please contact us for more information.
October 15th Deadline for Individuals and C Corporations
The extended due date for Individuals and C Corporations is October 15th, 2020. We request that all documents and payment is submitted by October 1st.
We look forward to hearing from you!
Waiver of Time Requirements for Foreign Earned Income Exclusion HAS NOT Been Extended
In April of this year, we released a newsletter discussing two Revenue Procedures published by the IRS that relate to the Foreign Earned Income Exclusion. You can use the following link to read more: Waiver of Time Requirements for Foreign Earned Income Exclusion
These Revenue Procedures provided guidance on how Taxpayers who would have been eligible for the Foreign Earned Income Exclusion using the Physical Presence Test, and who were forced to return to the US due to COVID-19, could be eligible to claim a prorated exclusion. The period covered by these Revenue Procedures ended July 15th, 2020. At this point the IRS HAS NOT extended the covered period.
If you have further questions on your eligibility, please reach out to us in order to discuss your facts. Remember, you would need to have been able to qualify for the foreign earned income exclusion if not for the civil unrest or COVID-19 events taking place.
Where’s My Economic Impact Payment?
If you did not receive your full or partial Economic Impact Payment during 2020, but you will be eligible based off your 2020 Adjusted Gross Income, a refundable credit for the difference will be available to you on your 2020 tax return. Please let us know if you have any questions about requesting these credits on your 2020 income tax return.
If you received an Economic Impact Payment in 2020, Notice 1444, Your Economic Impact Payment, should have been mailed to you 15 days after the payment was received. This notice provides information about the amount of their payment, how the payment was made and how to report any payment that wasn’t received. You should retain this notice for your records and provide it to your tax preparer when filing your 2020 income tax return.
Relief for Taxpayers Affected by COVID 19 Who Take Distributions from a Retirement Plan
The CARES Act provides that qualified individuals may treat as coronavirus-related distributions up to $100,000 in distributions made from their eligible retirement plans (including IRAs) between January 1 and December 30, 2020. A coronavirus-related distribution is not subject to the 10% additional tax that otherwise generally applies to distributions made before an individual reaches age 59 ½. In addition, a coronavirus-related distribution can be included in income in equal installments over a three-year period, and an individual has three years to repay a coronavirus-related distribution to a plan or IRA and undo the tax consequences of the distribution.
Read more information here for what qualifies as a COVID 19 distribution: Relief for Taxpayers Affected by COVID 19 Who Take Distributions from a Retirement Plan
Waiver of 2020 Required Minimum Distributions
Part of the CARES Act waived the requirement for minimum distributions to be made from certain retirement plans. It also provided that any distributions that have already been made can be returned back into the plan resulting in no tax, or the distribution can be rolled over into another qualified retirement plan.
In order to receive the non-taxable rollover treatment for distributions that have already been made, the distribution must be returned to a qualified retirement plan before August 31, 2020. Please let us know if you have any questions about how to return your minimum distributions before the August 31 deadline.