Due to the COVID-19 pandemic, earlier this year the IRS postponed federal tax filing and payments. The usual deadline of April 15th was postponed to July 15th 2020. You did not have to file any forms to request the extension since the IRS automatically postponed the deadline. The majority of us may have taken advantage of the new filing date. But with the deadline a few weeks away now is the time to get your returns and payments in to the IRS.
Tax season has always been stressful but 2020 has caused more anxiety due to the pandemic. While some of us followed stay-at-home orders that stretched across the U.S. others have been dealing with loss of income or COVID-19 illnesses in their families. All of these types of situations have made it difficult to meet in person with our tax preparer.
The important thing to remember is to take action now before July 15th to avoid penalties from the IRS. The first step to taking action is to gather your tax documents for 2019. Then review your prior year’s tax return to determine if you are missing any documents. Below you can find a tax checklist of documents you will need to file your taxes:
Tax Documents Required to File Taxes
- Personal Information: Your social security number and spouse’s social security number if filing a joint return
- Dependent’s Information: names, social security numbers, dates of birth; proof they reside in your home and childcare record if applicable
- Sources of Income: W2’s, self-employed forms along with expenses, unemployment, rental income records, retirement income, investments and income losses
- Deductions: home ownership, charitable donations, medical expenses, child care expenses, educational expenses
You have the option to file an extension if you think you will not be ready to file by July 15th deadline. The extension will provide you an additional three months to file your tax return. Keep in mind there is a catch. Even though the extension gives you until October 15th to file, you will still need to pay any owed taxes by July 15th. If you fail to pay by the extension you will face the penalty for failing to file and underpayment penalty.
If you cannot pay your owed at once to the IRS you do have options. You can set up a payment plan with the IRS, which offers a short-term or long-term plan. The short-term plan requires re-payment within 120 days with no fee to sign up. The long-term plan is for those that cannot pay their debt within 120 days and does have set up fees. If you are facing a hardship situation due to COVID-19 you can request an Offer in Compromise from the IRS. This allows you to settle a tax debt for less than you owe with a fee to apply unless you qualify for a low-income waiver.
If you have any question or to further assist you with your tax return please contact our office at 713-926-4233. You can also visit our website www.preminsure.com to schedule a complimentary appointment to process your tax return online.