How the Tax Delay Will Affect Your Quarterly Tax Payments
In response to the coronavirus pandemic, the IRS announced that it is extending the tax filing deadline to July 15. This extension also applies to quarterly tax payments. If you’re an independent contractor or small-business owner, here’s everything you need to know about how these delays might impact your planning, budgeting, or finances.
First- and Second-Quarter Payments Are Delayed
The deadlines for both first- and second-quarter estimated income tax payments (originally due April 15 and June 15, respectively) have been extended to July 15. You can make a single payment that covers both payments, as long as it is done by that date.
Extensions Are Automatic
You do not need to file additional forms or call the IRS to qualify for the extension — it’s automatic for everyone. However, payments are not automatically rescheduled to the new extension date. You still need to schedule your payments between now and July 15. If you had already scheduled a tax payment for April 15, then it has been made. But if you have a tax payment currently scheduled that you want to reschedule for the new deadline, you can still do that (but it won’t happen automatically).
Penalties and Interest Will Be Charged After July 15
To avoid penalties and interest, you need to plan to make your payments by July 15. According to the IRS, the payment amount can be found in the following locations for these forms:
Form 1040 or Form 1040-SR: line 23
Form 1040-NR: line 75
Extensions Don’t Necessarily Apply to State Deadlines
Any state filing and tax deadlines might be different. In Texas, the Comptroller of Public Accounts has more information on various filing extensions and resources for taxpayers and small businesses.
Further Filing Extensions Are Possible
You can still request a filing extension beyond the July 15 deadline, but payments are still due by that date. Both individual taxpayers and businesses may request a filing extension by submitting Form 4868 (individuals) or Form 7004 (businesses) by July 15. However, estimated payments are still due by July 15, and at this time, late payments will be subject to interest and penalties from July 16 until the date of payment.
You Can Still Pay Now
It’s not a requirement to wait until July 15 to make your quarterly payments. You can file your taxes now or schedule your payments for any date up until July 15.
If you have any questions about the insurance coverage you need during these uncertain times, contact your local Texas Farm Bureau Insurance Agent. Find more on preparing for your taxes here.
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