Tax Extension

Tax Extension

That's today on fox 24 news now.

We learned just last week that taxes ep won't be due until july.

A bit of a moving target, but here to tell us how to use this time wisely is our tax expert and instructor, thomas, and thank you for joining us and how have you been holding up?

>> i've been holding up just fine in my one bedroom apartment, overlooking the vast wasteland of king street.

And getting used to online teaching, i have to say.

>> keeping you busy.

>> yes, i do.

I have plenty.

>> the classes don't stop, but your interaction in the classroom has certainly been put on pause like the rest of us, and speaking of which, you are obviously using your time wisely and how should we as taxpayers use this extension with taxes not due until july for another few months?

>> you might want to stay in touch with a tax prepare, and in fact, i would strongly encourage that.

Some tax preparers will still be working during this time.

And in fact, many of them, like me for example, i'm allowing clients to securely upload documentation if they have access to a scanner.

So what that means, we can still get your returns prepared possibly during this time of quarantine.

Why that's important is this: we have an extension until july 15th to both file and pay with out penalty.

However, the irs is also saying that they encourage people to electronically file before then, as soon as possible if they expect they're going to be due back a refund.

Because with electronic filing and direct deposit, you can get your refund back within two weeks generally of filing.

Two or three weeks.

>> let me ask you this, let me just interject this real quick.

For someone who would have normally filed an extension, meaning they would not have filed and paid until october, is that extension getting pushed back at all?

Or is this basically the built in extension that you would have gotten anyways?

>> first off, let me clarify something.

Those who would have filed an extension normally on october 15th would have had until october 15th to file with out penalty.

But the clocks would start ticking for late payment penalty and interest on april 15th.

That was under the old law.

Now, what congress has essentially done, or what the irs has essentially done in this case is taken that april 15th filing deadline and they have crossed out the word april and turned it into july.

So you have until july 15th now to file with the need to file an extension.

Now instead of april 15th, you have until july 15th.

So as i've been telling people, it's just like those rent to own stores, 90 days same as cash.

There's no penalty or interest if you pay by july 15th.

But the clock will start ticking on july 15th for late filing penalty if you don't file an extension by then.

Late filing penalty if you don't pay by then, and interest if you don't pay by then so.

Just consider tax date to be july 15th.

>> does that mean that the tax filing for 2021 is going to be pushed back.

>> they have not said anything about 2021.

All they have said is that estimated tax payments can be made later than normal.

And there won't be underpayment penalty for not paying in evenly throughout the year.

>> let's talk about something else now.

Everybody is experiencing a financial hardship.

And a lot of people don't have any none coming in.

For those engaged in an installment with the irs, and they're unable to pay at this time, is there anything of relief in place for those taxpayers.

>> they have not addressed that yet.

I have a feeling that they're going to be addressing that at some point, because the problem i see with this is that many of these installment agreements have these payments coming out automatically from people's bank account when they have a payment plan setup with the irs.

And they have not announced they were going to stop those, but i do have a feeling that they will probably address this.

You have to remember something, this just got passed a few days ago.

>> i see, and i have one more question for you.

Real quick, you're working from home.

I'm working from home.

Is there any kind of deduction that people can take if they're currently working from their home forcibly on their next income tax return?

>> they have not recently stated the old home office deduction if that's what you're talking about.

And no, they have not made any provisions to save you on your tax bill for that.

Congress is going to be coming out in the next week or so and saying we're going to be giving everybody money, and i would seriously doubt they're going to say we're going to give back the home office deduction as well.

>> coming up next, our third installment with thomas about the 529 plan and what you need to know.

Just after recording our interview, thomas notified me that those on