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April 2020 - Maybe Out of Sight... Not Out Of Mind 2019 Taxes

MAYBE OUT OF SIGHT...NOT OUT OF MIND

As you now should be aware, the 2019 income tax filing deadline has been extended to July 15. Taxpayers also have until July 15 to make any federal income tax payments that were originally due on April 15, without penalties and interest, regardless of the amount they owe. This extension applies to all taxpayers and includes the first and second quarter 2020 federal estimates which were otherwise due April 15th and June 15th. This includes most of our clients’ state tax returns although, strangely enough, New Jersey’s 2020 second quarter estimate is still due June 15, 2020. Attaway New Joisey!

There’s no need to file any additional forms to qualify for this automatic federal tax filing and payment relief. Clearly, there are probably many reasons you may not be prepared to file anyway from issues dealing with the Pandemic, to not having the K-1 from the partnership you're in, to waiting for that third corrected 1099 statement your brokerage firm supposedly sent, or to just plain "out-of-sight-out-of-mind" and procrastination. As July 15th approaches, expect us to start “nudging” you as we will still want you to file an extension for you.

Taxpayers expecting a refund should file electronically. The benefits of filing electronically include:

  • Electronic filing is safe and secure. It uses modern encryption technology to protect tax returns. The IRS continues to work with states and tax industry leaders to protect tax returns from tax-related identity theft. This effort has helped put safeguards in place to make electronic tax filing a safe and secure option.

  • It's accurate and easy. Filing electronically helps taxpayers file a complete and accurate tax return. When we file electronically for clients, we will receive an acknowledgement from the IRS telling them their return is accepted as received.

  • People who file electronically get their refunds faster. When taxpayers file electronically and choose direct deposit for their refund, in most cases they can get their money in less than 21 days. If they mail a paper tax return, the refund can take six weeks or longer.

  • Taxpayers who owe, should file by the due date, and pay as soon as possible. It's always good to pay as much as possible to minimize interest and penalties.

So many of our clients use our tax return organizers which, during these stressful times, become even more useful. You are encouraged to mail in or even drop off your completed organizer and supporting documents. The office is open albeit with a skeleton staff as several are working remotely (if you saw Marty Abo eating his way thru this Pandemic, you’d question referring to him as “skeleton”). Many of you have the available time so why not “get this out of the way now”!

As you probably know, each January we mail out our “Tax Return Organizer” for our individual tax return clients. As our cover letter explains, although it’s generally blank the first year, we prepare your returns, the beauty of it is that prospectively the computer-generated organizer typically has the prior year’s information printed for a client’s easy comparison. Again, all to hopefully facilitate and streamline the compliance process. Everyone’s different but using the one someone might receive from another accountant, from their use of Turbo tax or even their own personal worksheets may work best for their particular situation. The client’s call. We’d still suggest everyone use an organizer, even if it’s only to serve as an effective “checklist”. A blank organizer is easily retrieved from our website at https://www.aboandcompany.com/files/2019-New-Client-Organizer.pdf