The fight against coronavirus is bringing changes almost daily in many aspects of our lives — including relaxing the deadlines on when we have to file our state and federal income tax returns.
Urbandale CPA Jeff Strawhacker says an announcement from Washington D.C. this morning is shifting back a key tax deadline three full months. “The federal filing deadline has been pushed back to July 15th, which is news because prior to that, they were only deferring the -payments- that were due on April 15th,” Strawhacker says, “so now we have both a filing and a payment deferral until July 15th on the federal side.”
As for our State of Iowa taxes, the due date has already been pushed back from April 30th to July 31st. While the news is music to the ears of procrastinators, Strawhacker suggests Iowans still move forward with their obligations and fill out those forms.
“I would encourage those who think they have refunds coming to try and file on time so that money can be returned to them and it can be injected back into the economy,” Strawhacker says. “Those that do owe taxes, this does give them an opportunity to defer those payments until maybe at some point when cash flow is a little stronger for them.”
Members of Congress are discussing proposals that would send sizeable checks to every American to jump-start the economy. The Senate version of the plan would issue $1,200 checks to all adults, $2,4000 per married couple and $500 for each qualifying child.
“If those payments do get sent out, there are a lot of options people can look at,” Strawhacker says. “It can be to pay down some bills, retire some debt, buy groceries, maybe some toilet paper — if they can find it. Or they could put it into their savings and save it for future needs down the road.” It’s still unclear whether those checks would be considered as “income” and would thus, be subject to taxes on next year’s returns.
There was another shift in federal policy earlier this week which he says will be of particular interest to Iowa’s employers.
“The president did sign a bill into law late Wednesday night that can provide some tax credits for wages paid for qualified family medical leave or qualified sick leave,” Strawhacker says. “They should look into that if they are continuing to make some of those payments.”
While new tax reform rules went into effect a year ago, complicating many Iowans’ returns, Strawhacker says there have been no significant changes this time around, “so this year’s a little calmer” for both the accountants and the clients.