If you are a “glass half full” kind of person, you can see some silver linings even in this COVID-19 pandemic. Because tax deadlines and procrastination often go hand-in-hand, we want to provide a helpful summary of federal and some state deadlines.
Receiving an extra three months to file your tax return can seem like an unexpected gift. But we’re creatures of habit, so pay close attention to the dates because many of the deadlines are significantly different from prior years.
Keep in mind that state tax deadlines might not match the federal tax deadlines. For example, compare the Illinois column with the Federal column below.
We recommend speaking with your financial advisor to make sure you are aware of the new tax deadline filing and payment requirements for your state tax return(s).
Should I delay filing until the deadline?
By now, most taxpayers are aware that the federal tax deadline was moved from April 15 to July 15. It’s usually better to file your tax return as soon as possible to allow extra time to handle unexpected delays.
State Tax Returns
We recommend speaking with your financial advisor to determine your due dates and other information that may impact your taxes. For instance, it can be beneficial to review how your state calculates interest and penalties during this pandemic and incorporate it into your tax strategy.
Typically, extensions give taxpayers an extra six months to file (taxes are usually due on April 15 and extensions on Oct. 15). This year, an extension only provides an additional three months to gather tax documents and file.
Estimated Tax Payments
Federal first and second quarter estimated tax payments are due on July 15 (you may submit a single payment to the IRS to cover both estimates before the due date). Currently third quarter estimates are due on Sept. 15, 2020 and fourth quarter federal tax estimates are due on Jan. 15, 2021. Unfortunately, many states are not consistent with the federal estimated tax due dates. For instance, Illinois did not conform to the federal estimated tax due dates and kept its original deadlines.
If you typically make estimated tax payments, we recommend contacting your advisor or CPA to determine if you still need to make tax estimates this year and when your tax estimates are due.
Given the current economic environment, it’s important that your financial team is working together to make sure you file in time for the postponed tax deadlines and avoid interest and penalties.