Tax day 2020 is right around the corner, so it’s time to start thinking about taxes. If you haven’t prepared your 2019 taxes yet, now is a good time to get started. The IRS extended the 2019 tax deadline to July 15 as a result of the COVID-19 pandemic, so taxpayers had three extra months to get their taxes in order. Now, the three-month extension is almost up, and the deadline drawing near. However, the IRS extension isn’t limited to 2019 filings. In fact, the extensions affected several parts of the 2020 tax calendar that you might not know about. This post explains everything you need to know about the upcoming tax deadlines, so you can prepare for tax day 2020 while there’s still time.
What’s Due on July 15?
Tax day usually falls on April 15. However, the IRS postponed tax day 2020 for three months as a result of the global pandemic. Tax day 2020 falls on July 15, and the date is approaching quickly. Here’s what you should expect:
2019 Tax Returns and Payments
The IRS gave taxpayers an extra three months to file and pay their 2019 taxes. You must file your 2019 tax return before July 15, 2020. If you owe taxes, you must submit your payment before July 15 as well. If not, the IRS could penalize you for late payment. Remember, you can request a payment plan if you’re short on cash.
Q1 and Q2 Estimated Tax Payments for 2020
In addition to your federal income tax return, estimated tax payments for both the first quarter and second quarter have been extended until July 15. Currently, the third and fourth quarter deadlines remain the same.
States determine their own tax deadlines, so you have to check to see your state tax authority’s web site to see when you have to pay. The IRS encouraged state governments to extend their deadlines too, but some states didn’t take the advice. Check with your state’s board of equalization for the latest information on state tax deadlines.
How to Prepare for Tax Day 2020
With tax day comes a lot of stress for many taxpayers. Taxes can be confusing and require a lot of attention to detail, you don’t want to miss any deductions and you want to make sure your taxes are prepared accurately and on time. Here are some tips to help you prepare.
Organize Your Documents
Start getting your receipts and tax documents in order now. Staying organized will make filing your taxes much easier. Gather all your receipts, 1099 forms, and other important tax documents ahead of time so you’re prepared to file when the time comes.
Prepare Your Schedule C
Self-employed workers and independent contractors must submit a schedule C form with their taxes. Before you submit your return, reconcile your schedule C figures against your actual transactional records to ensure accuracy. Triple-check all totals to ensure you don’t make a costly mistake.
Set Aside Funds for Tax Payments
As a general rule of thumb, it is a good idea to set aside 30% of your income for tax payments. This ensures you will have enough money to pay your tax bill at the end of the year.
File Your 2019 Tax Return
You must file your 2019 return before July 15. Filing your taxes electronically is the most convenient option, but you can also mail them in. If you owe taxes, you can submit your payment online through the IRS website. The IRS also offers installment plans for tax payments, but you should put in your request before July 15 to avoid penalties for late payment.
Don’t stress yourself out over taxes. The most important thing is filing accurately. Don’t sell yourself short. Make sure you are claiming every available deduction and taking advantage of appropriate tax credits. if you’re strapped for time, don’t panic. You can buy yourself another three months by filing an automatic tax extension. Click here to learn how to request an extension.
Tax Day 2020: Last Chance for Retirement Contributions
The IRS also extended its deadline for contributions to tax-advantaged retirement accounts. This year, you have until July 15th to make tax-deductible contributions to your IRA. You can deduct up to $6,000 for qualified contributions, so it’s a great last-minute tax deduction. If your tax bill is high, you should consider contributing to your IRA before July 15. It’s a great way to lower your tax liability, and it’ll help build your nest egg too.
Questions About The Upcoming Deadlines?
Tax day 2020 is almost here, but there’s no need to panic. If you need help preparing your taxes ahead of the deadline, you should talk to the tax pros at Shared Economy Tax. Our team of certified tax experts is standing by to assist with all of your tax deadline needs. Get started today with a no-obligation one-on-one strategy session with one of our expert tax advisors. Don’t miss any deductions or tax credits, consult with one of our experts today before its too late.