It’s been a very busy year for accountants and financial advisors. Updates and policy changes at the federal level seem to refresh daily. Here’s a rundown on the latest news and guidance from the IRS and the Treasury Department.
IRS might delay the filing deadline
As of right now, the IRS’s official tax filing deadline is July 15th, 2020. Which has already been pushed back 3 months from the traditional filing deadline. But just recently, Treasury Secretary Stephen Mnuchin dropped a bombshell announcing that they are considering pushing back the filing deadline even further, as late as September. For accountants, this makes all of the work on timing and compliance a moving target. While this does give more time for tax-preparers, it will definitely affect year-end planning and even tax considerations for next year.
Mnuchin did conclude his comments with this advice, “I would encourage all Americans, if you can file, go ahead and do it, particularly if you think you have a refund.”
IRS paying interest on 2019 tax returns
Most people receive their tax refunds within 30 days, so most do not know that if the IRS takes more than 45 days to issue a refund, they are required to pay the refund, plus interest. In another interesting twist, the IRS announced that for those who file by the new deadline of July 15th, it would pay those refunds as if they were late. So it very well might have paid to wait. Here is the IRS’ statement on interest payments, “Interest on individual 2019 refunds reflected on returns filed by July 15, 2020 will generally be paid from April 15, 2020 until the date of the refund. Interest payments may be received separately from the refund. By law, the interest rate on both overpayment and underpayment of tax is adjusted quarterly. The interest rate for the second quarter, ending on June 30, 2020, is 5% per year, compounded daily. The interest rate for the third quarter, ending September 30, 2020, is 3% per year, compounded daily.”
Second stimulus check
Every single day since the first round went out, there is a new article from a reputable news source debating the possibility of a second round of stimulus checks. So it can be difficult to differentiate between the signal and the noise. However, this is what we currently know. Both the president and a number of his financial advisors have voiced support for another round of checks to taxpayers. Senate Majority Leader Mitch McConnell set a July deadline to make a decision on whether to do another round. The House of Representatives have already passed the Heroes Act, which would offer another set of payments if signed into law. However, this legislation is unlikely to go any further, so any new payments would very likely have to be negotiated in a new set of legislation.
With an ever-changing environment and a 24-hour news cycle, it’s easy to get lost. Keep an eye on our blog to stay up-to-date on current developments.