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Update During the Coronavirus (COVID-19)

Mar 19, 2020 12:00:00 PM / by Lee Goudzwaard-Vaught

***UPDATED Mar 20, 2020***

Dear Clients and Subscribers:

We previously communicated our ongoing efforts to support you, our associates, and the community during the quickly developing Coronavirus (COVID-19) pandemic. We want to reiterate that we consider the health and well-being of all of us extremely important. No value can be placed on health!

During this time we have been receiving and answering a storm of questions regarding a variety of issues. We are going to address a couple of the top questions here, and provide the most current information, answers, and links to additional resources (more informational posts will follow):

Tax Payments and Tax Filing:

You probably heard even before the bill was officially passed that the individual and corporate tax payments typically due on April 15, 2020, have had their deadline (subject to certain limits*) extended until July 15, 2020. This extended deadline applies to certain tax payments — but not the tax filing deadline. As of 3/20/20 it was announced the tax filing deadline has also been extended to July, 15, 2020.

*The Applicable Postponed Payment Amount is up to $10,000,000 for each consolidated group or for each corporation that does not join in filing a consolidated return.
For all other affected taxpayers, the Applicable Postponed Payment Amount is up to $1,000,000 regardless of filing status.
For example, the Applicable Postponed Payment Amount is the same for a single individual and for married individuals filing a joint return. In both instances the Applicable Postponed Payment Amount is up to $1,000,000.

Our advice: Retaining cash and maintaining liquidity is more critical than ever before. Unless you have far more than enough cash and liquidity following tax payments, we recommend delaying tax payment (up to the limits provided) until July 15, 2020, so you have the money available.

Additional advice: Review your current credit lines so you know what you have available (don’t assume!); consider reducing payroll for current business owners; review insurance policies to see if you have coverage for disruption or losses; and explore refinancing opportunities in this low rate environment.

You may have heard or thought the tax filings deadline had been extended as well. As of 3/19/2020 at 2:00 CST this is NOT the case. The standard filing deadlines for all federal and informational returns still apply. As of 3/20/2020 it has been announced that the Federal income tax filings are also extended until 7/15/2020. Many states follow the Federal rules and are expected to delay the state tax filing deadlines as a result. You may check the status of your state here: https://www.aicpa.org/content/dam/aicpa/advocacy/tax/downloadabledocuments/coronavirus-state-filing-relief.pdf

Our advice: We see no benefit in delaying filing. Contact us for help preparing your returns. If an extension to filing is warranted, we can help you with that as well. If nothing else, preparing your tax return tells you what amount you can delay paying until July 15, 2020. Otherwise, how will you know where you stand? You need to know where you stand in order to plan!

The tax filing deadline remains 4/15/2020 for individual and corporate tax returns. (S-Corporations and Partnerships whose tax filing deadline was 3/15/2020.)**

**Many have asked whether certain taxes are included in the tax payment extension or not. This is the simplest breakdown for both Federal and Minnesota state taxes at this time (the situation is constantly changing and we will keep you updated as official changes are made):

  • Federal income taxes due for 2019
  • Federal self-employment income taxes due for 2019
  • Federal estimated income tax payments due for 2019
  • Minnesota has yet to make any changes to the deadlines for tax filing or taxes due, with the exception of a one-month delay for certain businesses' sales taxes normally due March 20, 2020. Gov Walz announced at 2pm 3/20 that Minnesota will follow suit, and delay filing and payment deadlines until July 15th. More information can be found here: https://www.revenue.state.mn.us/sales-and-use-tax.
          

This is a very stressful time, especially for small business owners. This is a time that expert advisors and accountants are made for—we can’t solve every problem, but we can often help, especially in planning, so please reach out. You don’t have to go through this alone.

We are all in this together. We will continue to support you and appreciate your support in return. Have questions? Meet with an advisor. 

Please check back for more updates, and above all, stay healthy and safe.

Lee Goudzwaard-Vaught

Written by Lee Goudzwaard-Vaught

Client Development Manager

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