Certain compliance under US tax laws (Internal Revenue Code ) for which deadline was fixed as 15th April was extended to 15th July due to the COVID-19 pandemic .As this automatic three-month extension to July 15 is fast approaching, this post is a reminders to readers that you need comply with following five tax related jobs within 15th of July 2020 , else there will be consequences in form of penalty and higher tax outgo.
1.File 1040 Extensions
If you are unable to file 2019 individual 1040 tax return by the July 15th deadline , you must file a Form 4868 for extension of tax filing deadline . On doing so, an extension upto October 15th shall be granted automatically by IRS.
It is wise move to pay tax due as per computation of tax liability before filing Form 4868 .This will save you lots of tax as penalty for late payment or interest on over due taxes and also for late filing tax return may not be payable by you as all those computation depends on tax due on return.
2.Pay Estimated Tax Payments
Estimated taxes due on April 15th, and June 15th were extended to July 15th on account of COVID-19. If you do not pay the advance tax , a penalty for underpayment of the estimated tax shall be levied on you. However, for 2020, penalties for failure to pay federal income taxes during the April 15–to–July 15 period will be disregarded.
3.Contribute to Roth or Traditional IRA for the 2019 Tax Year
July 15th is the last day for making 2019 contributions to Roth or traditional IRAs. So , do not forget to make contribution to these retirement instruments.
4.Refund Claims for the 2016 Tax Year
As you know , the last date to claim refund related to tax year 2016 was 15th April 2020. This three-year statute of limitations for 2016 tax returns was also extended to 15th July , due to the COVID-19. Thus, no refund will be granted for 2016 returns (original or amended) filed after July 15th. Therefore, it is very important to file tax return for 2016 & claim tax refund pertaining to tax year 2016 by 15th July
5.Foreign Account Reporting Requirements (FBAR)
If you are supposed to file report to the U.S. government during each calendar year. This reporting requirement-known as FBAR – is to be done by the due date for filing individual 1040 returns. FBAR is submitted online to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN),by April 15th. However, FinCEN grants an automatic extension to October 15th each year, so if you missed the April due date this year, you still have until October 15th to file the FBAR.