If you’re self-employed or own a small business, you might be wondering what these recent tax announcements mean to you. Here is a summary of the most important things you need to know.
The due date to file and pay your 2019 taxes has been extended to July 15, 2020.
First and Second Quarter 2020 Estimated Tax Payment Deadline
If you file quarterly estimated taxes, the estimated tax payment deadline has been extended for the first and second quarters of 2020. Both deadlines are now July 15, 2020.
Tax Payment Extensions for Self-Employed and Businesses
Regardless of the amount owed, federal tax payments, interest fees and penalty fees have been extended to July 15. As stated above, this also applies to the first and second quarter 2020 estimated tax payments.
Refunds Will be Processed as Normal
Though the deadline for filing your federal taxes has changed, the IRS expects to process refunds like normal, meaning there should not be a longer than usual delay in receiving your refund. The IRS typically issues 90% of tax refunds within 21 days or less from acceptance with e-file and direct deposit.
Tax Relief Under the Families First Coronavirus Response Act
The Families First Coronavirus Response First Act provides relief in the form of refundable tax credits for sick leave and family leave for eligible self-employed and small business owners. To help with your loss of income, you might be eligible to receive a sick leave or family leave tax credit if you are:
- quarantined due to coronavirus: up to ten days of sick pay at your average rate (maximum value: $511 per day).
- caring for a quarantined family member: up to ten days at two-thirds your average rate (maximum value: $200 per day).
- unable to send your child to school or daycare because the facility is closed: up to 50 days of income at two-thirds your average rate (maximum value: $200 per day).
Note: Because these credits are refundable, if the credit you are claiming is worth more than your tax bill, the government will give you back the difference in your tax refund.
We highly recommend working with a professional like Denver Pro Tax to file your taxes this year. In addition to the COVID-19 tax relief, there are countless tax credits that you might qualify for to get the largest tax refund possible. If you are in the Denver Metro Area, we would be happy to help you. Contact us today.
Self-employment can get tricky when filing your taxes. Click here for more information on filing taxes if you are self-employed.