US Treasury Secretary Steven Mnuchin arrives to testify during a House Ways and Means Committee hearing about the Fiscal Year 2021 budget request on Capitol Hill in Washington, DC, March 3, 2020.
Saul Loeb | AFP | Getty Images
If coronavirus is keeping you from filing your tax return in a timely fashion, it just might be time to ask for an extension.
The illness has hampered supply chains and battered stock markets around the world, and the ripple effect could hit your 2019 tax season.
Accountants and small businesses are also watching how the IRS proceeds with the March 16 tax return deadline for partnerships and S-corps.
Steven Mnuchin, Treasury secretary, has the authority to push out the deadline for tax filings and payments for up to six months, said Nicole Kaeding, vice president of policy promotion at the National Taxpayers Union Foundation.
In the event of a federal disaster, he could extend the deadline by up to one year, she said.
For now, it’s unclear how Treasury and the IRS will proceed, but taxpayers do have tools at their disposal if they think they need more time.
Pay the taxes owed by April 15, and ask the taxman for six more months to wrap up your return.
“What’s important to the extent you can’t file your return is that there is an extension to file and anyone can take advantage of it,” said Gary DuBoff, CPA and principal in the tax and accounting department at MBAF in New York.
Globally, there have been more than 121,000 confirmed cases of COVID-19, according to data compiled by Johns Hopkins University. Of these, more than 1,000 are in the U.S., Johns Hopkins found.
The IRS had received 59.3 million individual income tax returns as of Feb. 28. Of these, 56.7 million were filed electronically.
Nevertheless, a pandemic could have a ripple effect on tax professionals and filers.
“Many low-income individuals use the Volunteer Income Tax Assistance program and have a volunteer prepare their returns at no charge,” said Kaeding.
Normally, these locations are available at community centers, libraries and schools — places people may not want to be as COVID-19 continues to spread.
“Many of those clinics and sessions will likely need to close as the disease progresses,” said Kaeding.
There’s also the question as to what kind of service CPAs and taxpayers might encounter from the IRS as the disease continues to spread.
“There are lots of individuals who utilize their service to get assistance filing their own returns, or they’re practitioners with questions concerning clients,” said Barry Picker, CPA and co-founder of Picker & Auerbach in Cedarhurst, New York.
Widespread COVID-19 could even hit tax professionals close to home.
“What happens if the accountant is sick?” asked Picker. “I think the unfortunate truth is that if it’s in our office, then everyone is going to be quarantined.”
Until Treasury provides a clear path on how it will proceed, the best course of action is to wrap up your return.
If you think you need more time, calculate the estimated taxes you’ll owe for 2019 and send payment to the IRS by April 15 — as per usual. Ask for a six-month extension to file your actual return.
Meanwhile, if you have everything you need to file, get to it.
“Nothing is official, so if you are close to finishing the return, go ahead and finish,” said Kaeding.
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