US Tax Archives - Donnelly Tax Law

TAX DEADLINE: The IRS Finalizes The July 15 Deadline

The IRS will not consider auto-extending the tax deadline beyond July 15 this tax season, but options are still available.

Many have been calling it the never-ending tax season.

The changing tax deadline, along with a variety of potential tax incentives resulting from the COVID-19 pandemic, remains at the point of conversation during this tax season.

Until now, it has been unclear whether this tax season’s deadline would change yet again to help US citizens cope with the financial setbacks brought about by the coronavirus this year.

Background On This Tax Deadline

Due to economic downturns created by the coronavirus, the IRS and US Treasury officials changed the tax deadline from April 15 to July 15 back in March.

Until last week, the further postponement of the US tax deadline has remained a topic of discussion.

On March 13, 2020, the President of the United States issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act in response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic (Emergency Declaration). The Emergency Declaration instructed the Secretary of the Treasury “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency”.

On March 18, 2020, the Department of the Treasury (Treasury Department) and the Internal Revenue Service (IRS) issued Notice 2020-17 providing relief under section 7508A(a), which postponed the due date for certain Federal income tax payments from April 15, 2020, until July 15, 2020.

For an affected taxpayer concerning specified filing and payment obligations, the due date for filing specified forms and making specified payments was automatically postponed to July 15, 2020.

This relief was automatic; affected taxpayers did not have to call the IRS or file any extension forms, or send letters or other documents to receive this relief. Footnote 1

IRS Keeps July 15 Tax Deadline

Treasury Secretary Steven Mnuchin announced the change in the tax return deadline back in March and continued to discuss the possibility of pushing the tax deadline beyond July 15 until recently.

The IRS has now confirmed that the deadline will not automatically extend to October 15.

Tweet

The US Treasury department has drawn the line at the administration’s consideration of such a move.

The IRS won’t extend the deadline, but they will provide payment options to help taxpayers in need as stated below:

“The IRS understands that those affected by the coronavirus may not be able to pay their balances in full by July 15, but we have many payment options to help taxpayers,” IRS Commissioner Chuck Rettig said in a statement. Footnote 2

How do I file an extension for my tax deadline to October 15?

If you need extra time beyond the IRS deadline of July 15, you can file an IRS extension.

Taxpayers who may continue to need additional time to file could choose to submit the appropriate extension form by July 15, 2020, to obtain an extension to file their return. The extension date will not go beyond the original statutory or regulatory extension date of October 15, 2020.

Here is information on how to apply for an extension of time to file.

Please be aware that:

An extension of time to file your return does not grant you any extension time to pay your taxes.
You should estimate and pay any owed taxes by your regular deadline to help avoid possible penalties.
You must file your extension request no later than the regular due date of your return.

How may we help you?

At Donnelly Tax Law, we take care of filing an extension for our clients, just to make sure we always have plenty of time.

Let us help you meet your tax needs. Talk with us today.

Or do-it-yourself with our resources for doing your taxes, from e-books to online courses.

Be sure to join our conversation on Twitter and follow us @CryptoTaxFixer.

What Clients Are Saying About Donnelly Tax Law

Clients of Donnelly Tax Law are reporting top-notch crypto and expat tax reporting results with Clinton Donnelly and his expert staff of Enrolled Agents.

At Donnelly Tax Law, we believe every crypto taxpayer can have a “Bulletproof Crypto Tax Return.” Our website offers powerful do-it-yourself resources and full-service crypto tax preparation services.

We’ve helped taxpayers owning cryptocurrencies:

Avoid over $40 million in gains by using Like-Kind Exchange calculations.
Prepared over 850 anti-money laundering reports required for many crypto traders.
Prepared over 1025 tax amnesty returns needed by crypto traders correcting back filings. (Our acceptance rate is 100% success.)
Moreover, we’re one of the few firms with experience defending crypto returns at an IRS audit.
We are experts at filing returns for expats and foreign corporations.
We have clients in 48 countries.

But don’t just take our word for it.

Here’s what clients are saying about Donnelly Tax Law:

Clinton's expert advice helped me utilize international tax treaties to avoid double-taxation by the IRS. I will continue using Clinton as my tax professional for the years ahead and would recommend him to any US citizen living abroad as well as any US citizen who is involved in trading cryptocurrency.

David

Sweden

The process was very easy. I feel confident my taxes have been done correctly and would like to thank him for the peace of mind this brings me.

Claire

Spain

Clinton took the bottomless headache of the crypto [currency] documentation required for taxes, and condensed it to a simple set of instructions.

Nathan

Saudi Arabia

Clinton assisted me in handling a complex cryptocurrency filing, for several digital currencies including Bitcoin, Ethereum, and Litecoin. His support allowed me to benefit from the financial growth opportunity of cryptos while conforming with developing US tax laws. It pays to stay on the right side of the law, and Clinton made it as easy and straightforward as possible. Thanks, Clinton!

Marc

Nevada

[Clinton] demonstrated deep understanding in a specialized area of tax law and is helping me achieve a great result – we’ve been able to go back and fix 5 years of mistakes and errors made by previous advisors that created significant financial impact. He’s also taken less time to complete the same work previously done by a small group of professionals. I’d be happy to recommend him to any American living overseas.

Aaron

Norway

Clinton is very knowledgeable and has hands-on experience in dealing with international taxation matters specifically related to Canada/US reporting. Clinton was able to identify several mistakes in a prior return that was actually prepared by one of the Big 4 accounting firms.

Umair

Michigan

Clinton is very knowledgeable and saved me money with my tax return.

Julie

Puerto Rico

He resolved my tax needs quickly and found discrepancies my last tax guys completely missed and saved me thousands of dollars in taxes. I wish I had found Clinton Donnelly years ago. Can't recommend him enough!

Emran

Texas

I had no idea about how to sort out my American taxes as an ex-pat living in the UK. Clinton made it easy and painless to get caught up on filing back tax returns.

Skye

As a US expat working in Europe, I highly recommend Clinton Donnelly to help you file/declare taxes!

Danielle

Spain

I really recommend him to any American who is looking forward to sleep in peace regarding Tax Return filing in the States while leaving abroad.

Rafael

Panama

Not only did he simplify the process immensely, but he was clear, fast and professional. If you're an expat looking tax help, I strongly recommend connecting with Clinton Donnelly.

Max

Spain

Clinton helped me a ton with cryptocurrency related matters on my tax filing this year. He works quickly and professionally and has a well-honed process every step of the way.

Matthew

New York

Clinton relieved the stress of figuring out the taxes due on my Bitcoin trading last year. He was efficient and timely. He answered all my questions related to my wallet and international tax laws on reporting.

Todd

Arizona

Clinton saved us money on our first encounter!

Deanna

Mexico

Mr. Donnelly was extremely professional, answered any questions, and gives exceptional service. I appreciate the attention to details and the handling of my taxes in such timely manner.

Rachel

Panama

I highly recommend Clinton if folks have foreign businesses or accounts in a foreign land as he is well versed with these types of returns and masters them.

Siddharth

Texas

I highly recommend Clinton if folks have foreign businesses or accounts in a foreign land as he is well versed with these types of returns and masters them.

Tyler

New York

I highly recommend Clinton for preparing tax returns for anyone with international interests.

Stuart

Texas

I thought do-it-yourself tax online tax preparation was straight forward but working with Clinton has definitely opened a new door for me.

Erich

Singapore

Clinton is extremely clever and truly knows the law environment you are working in. In our case, he even reviewed international tax treaties to improve our tax report, which ended up saving us a lot of money in taxes.

Santiago

Venezuela

I went through a dozen accountants, CPAs, and accounting partners. None of them were able to get my taxes filed, and after much searching and frustration, I finally found Clinton.

Ashray

Portugal

If you are an American expat it is imperative that you speak with Clinton about your situation before the IRS gets ahold of you. The IRS wants your money. Clinton can show you how to keep the IRS off your back and put more money in your pocket. Highly recommended.

Chuck

Panama

Rudi

Panama

If you have distributed assets and income or are concerned about succession planning, Clinton will accurately guide you through the legal minefield of international laws taking into consideration your country of residence, source of income, source location of income, citizenship, time in country as well as other factors to determine your tax status and I trust his guidance implicitly.

Jim

Columbia

I would highly recommend Clinton for anyone working overseas and specifically anyone looking to utilize the Foreign Earned Income Tax Exemption. I simply cannot say enough good things about Clinton and have recommended him to numerous people.

Michael

Hong Kong

For months I tried tracking down an accountant or anyone who had the experience and brain to be be willing to do the work and help me out with my situation. So I contacted [Clinton] - 15 minutes later he had the information I needed to sort everything out!

Pascal

Malaysia

Without any hesitation, I recommend that anyone with a US tax issue and who is “technologically and paperwork challenged”.

Mary

Panama

He's very professional, explains things in a clear manner and has a system set up which makes it far easier to communicate via the internet, which is important to us since we live in a different city than Mr. Donnelly does.

Karin

Panama

I went through a dozen accountants, CPAs, and accounting partners. None of them were able to get my taxes filed, and after much searching and frustration, I finally found Clinton.

Benedict

Germany

[Clinton] saved me thousands on my taxes this past year. He is wise beyond belief of the complexities of the tax code and he is also patient and concise in explaining it to the people who think the tax code is tangle of complexities.

Patty

Digital Nomad

Clinton took care of my tax return twice so far, and I’m glad he did. He provided excellent advises with a very smooth communication. He masters his area of expertise, I definitely recommend him.

Melissa

Panama

Clinton took care of my tax return twice so far, and I’m glad he did. He provided excellent advises with a very smooth communication.

Mehdi

Switzerland

Clinton was extremely helpful at explaining with great detail all the peculiarities of my situation and was very timely at returning all of my emails.

Ignacio

New York

Clinton prepared all the paperwork required and represented me whenever required to the IRS. He is extremely knowledgeable and a pleasure to work with.

Sandy

Canada

Clinton has been handling my taxes for the past 3 or 4 years. He's been a godsend! He provides clear and concise answers, excellent advice and amazing service. In today's political climate it's best to have all your bases covered with the IRS and Clinton's amazingly good at making sure you do.

Rebecca

Panama

Be A Happy Tax Client With Donnelly Tax Law

Now that you’ve heard from others who have benefitted from Donnelly Tax Law, consider becoming a happy client as well.

Schedule a consultation today.

Or do-it-yourself with our resources for doing your taxes, from e-books to online courses.

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Taxes Are Sexy! Transcribed Interview Between Clinton Donnelly and Paul Jordan

Get excited to learn about taxes in this podcast interview between Clinton Donnelly and Paul Jordan. Find out why taxes are sexy!

Taxes. Do they have intrigue? Can they be interesting? Excitingly appealing? Even sexy?

We think so! At Donnelly Tax Law, we believe taxes are sexy because the knowledge that can save you big money on your taxes is desirable.

In this interview on Life, Love, and Coffee with Paul Jordan, we provide clarity on how you can get your taxes right because of how quickly everything is changing moment by moment.

Paul says, you’ve got to make sure you stay on top of those types of things, so he wanted to talk about where we are now and where we should be when it comes to taxes.

What makes crypto taxes complicated?

Clinton Donnelly: Well, Paul, I talk to a lot of crypto traders. A lot of crypto traders are unique because this is the only time they’ve ever invested.

Until getting involved with cryptos, their tax lives had been simple.

They took their documents to a tax professional, or they used Turbo Tax, plugged in the numbers, and filed a return.

But once they started trading cryptos, they moved into the echelon of a complex tax return.

It’s a complicated tax return because:

the accountants don’t know what to do with a crypto tax return
the tax software packages like TurboTax and TaxAct don’t know what to do with a crypto tax return

So crypto traders wind up on their own. And it’s scary for everybody.

What hit me in these last couple of months is that most people don’t know how to do a tax return in general.

Before using tax software, you went down to the post office, and they would have racks of tax forms.

You’d go home, fill out the forms, sign it, and mail it in. You had a basic familiarity with these things.

But now, people have no idea how to read them.

By relying on high volume tax preparer companies and depending on tax software packages, we’ve made ourselves ignorant about how taxes work and how they operate.

That’s why many younger crypto traders are overwhelmed by the impact of their crypto trading on their taxes.

Getting Back To Basics With Your Taxes

I’ve developed some educational things, and this is my passion. I realized I don’t need to teach people how to do crypto taxes; I want to teach people how to do taxes in general. Nobody’s ever done that.

We’re creating courses at DonnellyTaxLaw.com to help you overcome your fear of the IRS and learn to do your taxes.

Paul Jordan: Oh yeah, say more.

Clinton Donnelly: There are a lot of topics to cover. One is, what is tax? Is it our income? Is it our profit? What are those things? And then we move into what are the forms? And then, how do you submit the documents? Do I use a preparer or do it myself? And then what happens if I get a letter from the IRS?

I’m excited about teaching people to do their taxes and taking control of their lives so that taxes are not a thing that makes you terrified before the taxes are due in April.

When I was growing up, nobody ever taught me about the most significant expense I’d have in my entire life: taxes. Or how to fill out my tax form. The forms that are the most considerable interaction I’d ever have with the U.S. government.

And today, my issue with the accounting profession is that they’ve entirely abandoned crypto owners. Most accountants will not accept any responsibility for your crypto tax return.

Taxes Fall Into Three Categories

Clinton Donnelly: The first category would be an income tax. You’re taxed on income that you make. Many people hate this tax, but I would rather make a million dollars and pay $200,000 in taxes than make $20,000 and pay no taxes. So taxing my income, that’s not bad. I can swim faster than they can come after me.

The second tax category is a consumption tax. This would be a sales tax, or licenses and things like that, or excise tax. They consume you with buying things. When we think of the Boston Tea Party, there was a 2% excise tax placed on the sale of tea, and they decided to protest on that 2%.

The third category of taxes is a wealth tax. Now, this is a very harsh tax, in my opinion. It taxes you every year because you own something. You didn’t earn money; you didn’t consume it; you just have it. This would be property taxes. For example, your home in the United States.

Crypto Traders and Taxes

My mini-courses will teach you to think differently about taxes, about retirement, about your assets, and how to report cryptocurrencies.

Education can help you overcome your fears, and most people are just afraid of taxes.

There are a couple of things that crypto traders need to understand: when you trade with cryptocurrencies, every time you trade from coin one to coin two, that’s a taxable event.

Now, what do I mean by a taxable event? Well, if you made money on that coin.

If you bought the original coin in U.S. dollar terms, and you bought it for $1,000 and you sold it for $2,000,then that’s a $1,000 gain, right?

Let’s say you flip it around the other way. You bought it at $2,000 and it went down to $1,000 when you sold it. That’s a negative gain. That’s a negative $1,000 gain, or we might call it a loss. There’s a positive gain or there’s a negative gain.

Now, I’m not saying taking the cash out. I’m just saying that if I jump from coin A to coin B. When I do that conversion, I’m selling coin A. I have to look at what I bought coin A for, and that’s the gain. Every single one of those, every single gain, is a taxable event, positive and negative.

We add them all up, you net it out at the end of the year, and you have to pay taxes on the gain. It does not matter whether you took those profits out in cash to your bank account. That is not relevant because it is a gain nonetheless.

Many crypto traders are starting to become aware of the fact, “Oh yeah, well, if I have gains, I’ve got to pay taxes on the gain.” But guess what? If you had a loss, those losses are negative gains. Those negative gains reduce how much you have to pay on the positive gains because you add them all together. You want negatives to offset your positives.

I helped a guy reduce his taxable gains by $15,000 last week by claiming all his losses. That’s about $4,000 that he cut off his tax bill from losses.

Paul Jordan: Wow. Wow.

Most Americans Still Need To File Their Taxes

I did a poll recently, and about 70% of Americans haven’t done their taxes. I encourage Americans to give it a try on their own.

Taxes are the most significant expense that you’re ever going to have in your life. One-third of everything you earn is going to go to taxes. It’s time to start thinking about it.

If you need a consultation, if you want us to do your taxes, or you have a question, sign up for a consultation, and we will talk. My website is donnellytaxlaw.com.

I have an advanced law degree in international financial regulation, including taxation. I’m an enrolled agent. I’ve specialized in complex tax returns, particularly crypto tax returns and tax returns for ex-pats, people living outside the U.S. We also specialize in doing foreign corporation reporting.

Cryptocurrencies have a lot in common with people outside the United States because you’re investing in crypto exchanges outside the United States. You start to run afoul of a whole slew of U.S. anti-money laundering laws, so really focus on the anti-money laundering compliance because this is the easiest way for the IRS to crush anybody on their crypto taxes.

I’ve done over 1,000 tax amnesty returns and about 800 crypto returns. My largest trader is up into like 200,000 transactions a year, that type of thing. So we will never reach a point of being paralyzed.

Tax Returns That Are Bulletproof Against The IRS

An excellent tax preparer pays for themselves.

You can have a bulletproof crypto tax return, a tax return that keeps you safe from the IRS when they shoot their bullets, which is my focus. Not only do we do tax returns, but I defend crypto tax returns before the IRS.

We have one going on right now where we’re protecting them. We’re on top of the research, the legal analysis, and all that stuff. You might be surprised to hear this, but 98% of all tax preparers have never defended a tax return before the IRS. That’s like getting in the car with a taxi driver who just got his license yesterday.

Paul Jordan: Right.

Clinton Donnelly: So that’s the difference in our company: we love what we do, we love helping people. My biggest passion right now is to help as many people as possible, so I’m creating these tools to empower people to build their own crypto bulletproof tax returns.

So that’s a bit about me and Donnelly Tax Law. Love to help anybody, set up a call if you have a question.

Paul Jordan: That’s fantastic. Well, I think that’s an excellent jumping-off point. I want to thank you so much for coming on the podcast today, educating us, and getting us to move forward on taking care of our tax responsibilities.

Listen To The Podcast

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Coronavirus Relief – CARES Act Approved for Individual and Business Help

In efforts to provide Coronavirus relief, Congress has come to an agreement on the CARES act stimulus bill. Learn the latest about what that means for you.

In efforts to provide Coronavirus relief, the Senate has passed a stimulus bill from Congress that is known as the CARES Act. The White House indicated it is acceptable to the president as well. The exact details are not clear yet, but the major provisions have been revealed.

The New York Times reports that there are five key provisions, noted below, although there still may be some uncertainty about the exact numbers.

Direct Payments to Taxpayers for Coronavirus Relief

The NYT reports $1,200 in direct payments to each taxpayer, with phaseouts for those earning between from $75,000 to $99,000, plus an additional $500 per child. The Wall Street Journal has the same numbers, without specifying the phaseouts.(Those with little or know tax liability might receive only $600.)

For the purpose of calculating the amount, the government will use 2019 returns, if they’ve been already filed. Otherwise they will use 2018 returns.The money will be directly deposited into taxpayers’ accounts, if the IRS has account information. Otherwise, it will mail paper checks. This could happen in the next few weeks.

Unemployment Benefits Increased and Radically Changed

The NYT says the bill extends jobless insurance by 13 weeks and includes a four-month enhancement of benefits. Insiders, according to the NYT and WSJ, say that gig workers such as freelancers and Uber drivers will also be covered, a major change in how unemployment insurance works.

According to the New York Times, eligible workers will get an extra $600 per week on top of their state benefit.

Coronavirus Relief Gives Small Businesses Aid With Conditions

A major sticking point in the negotiations was whether aid should go to businesses or to individuals. A novel provisions does both: The government will guarantee loans to small businesses and forgive those loans if the companies keep their employees. This gives these businesses a strong financial incentive to avoid layoffs.

Federal Reserve Loans — With Heavy Oversight

This was another controversial provision — billions of dollars in a fund controlled by the Federal Reserve. Opponents characterized this as a slush fund that benefits companies at the expense of their workers.

However, additional conditions helped ensure its passage; the government will immediately reveal any recipients, and an inspector general and a congressionally appointed board will monitor it, according to the NYT. The WSJ noted companies receiving these loans cannot do stock buybacks now or in the near future. The total amount of the loan fund is estimated to be about $500 billion.

Coronavirus Relief Health Assistance

The bill includes upward of $100 billion in aid to hospitals.

Again, none of these numbers are final, and the bill has not yet been signed, although there is wide agreement it will go through as is. We’ll have more updates as they become available, including information on the mechanism for distributing the aid checks.

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COVID-19 Alert: The Silver Linings This Tax Season

Learn about the COVID-19 precautions we’re taking and some of the latest news and tips for enduring the pandemic and saving you money on your taxes.

Right now, times are uncertain with the spread of COVID-19.

Unpredictable emotions are running high, with massive changes forced on your everyday routines due to the Coronavirus.

But the human race is resilient and we are in this together as a global community.

In times like this, when things seem rather bleak, there is always a silver lining to be found.

We look forward to doing our part at Donnelly Tax Law to help you see those good things this tax season.

We know this year will be like no other and the last thing we want to add to your worry is interruptions to completing your taxes.

So, while we all learn to deal with this new COVID-19 pandemic together, we want to let you know you can continue to count on your tax family here at Donnelly Tax Law to get you through this trying time.

Practices That Make Us Strong During COVID-19

We are putting your safety above all else in the upcoming weeks.

As the COVID-19 pandemic forces changes in our everyday routines, our priority at Donnelly Tax Law is to ensure the safety of our staff and to solve the tax concerns of our customers.

Donnelly Tax Law was built intentionally for a robust operation that is resilient to virus threats, both medical and electronic.

Our work will not be slowed down by the pandemic. Even in normal times, we automatically file extensions for our clients so that the April 15th deadline is extended until October 15th. Read further for more information about the filing and payment deadlines being extended by the IRS.

Donnelly Tax Law is a team of remote workers and therefore we are not exposed to the health risks of a typical shared physical office. We will continue to work on your behalf, even with regional lockdowns.

Precautions We Are Taking During COVID-19

We are implementing quarantine procedures for deliveries we receive. This safety measure will add a couple of days to the paper return filing procedure, but it will keep us working happily and healthily on your returns.

All of our systems and data are cloud-based on highly-secure systems.
All data is encrypted.
All of our systems require two-factor authentication for extra security.

We are in communication with our vendors to make sure all critical systems remain available. We do not expect any unplanned outages.

COVID-19 Resources and How to Save A Lot Of Money With Your Tax Returns

We are still working hard for you! Donnelly Tax Law has a staff of eight people. We have always worked remotely, so the pandemic has not disturbed our business processes.

We also have a staff backup strategy, so that if any team member, including myself, needs to take sick leave, we have a backup so the work can continue.

Save 20% By Paying Your Invoice With Bitcoin

From now until April 15th, we are offering a 20% discount to current and future clients for any portion of your invoice that you pay or prepay with Bitcoin.

Our team is standing by to get you more details on how to take advantage of that special pricing.

Don’t have any Bitcoin? Start an account at Coinbase or Kraken.

Due To COVID-19, IRS Delay Filing And Paying By Three Months

To help cope with the COVID-19 Coronavirus, the IRS has delayed payments and filing by three months. July 15th is now the new due date for filing individual tax returns and making the final payment on 2019 taxes. There is no penalty for extra interest because of the three-month delay. We already automatically extend the filing deadline to October 15th for all of our customers.

The good news is that now there is extra time to pay!

If you are a client and your tax payment is scheduled already for auto-debit and you want to delay it, you will need to cancel the debit following the instructions in this link.

Making The Most Of The COVID-19 Isolation

If you are part of our tax community, you can take advantage of the extra free time to finish gathering all your tax documents and crypto records.

Once completed, upload them to your secure ShareFile folders and let our client manager know so we can proceed with preparing your taxes.

You can also use this time to learn more about US expat taxes and cryptocurrency taxes with the various ebooks I’ve written about each topic. Visit our online ebook store and discover additional crypto tax tools at our site CryptoTaxAudit.com.

Learn about other important COVID-19 news from our blog. If you haven’t already, you can subscribe to our newsletter so you get notified of our latest posts.

Clinton Donnelly In The News

One last note, we are excited to report that I’ve been staying at the top of crypto news this tax season. I’ve taken part in multiple interviews with several national and international crypto podcasters, such as crypto pioneer Charlie Shrem, Brad Kimes, Ivan on Tech and more.

WATCH NOW: Crypto Tax Amnesty? CPA Clinton Donnelly Shares Critical Insights on How to Talk to the IRS and File

Coronavirus Relief Package Signed Into Law – More to Come

The Families First Coronavirus Response Act (H.R. 6201) has been signed into law to provide Coronavirus relief to many. Read more to learn the latest.

The Families First Coronavirus Response Act (H.R. 6201) is now law, and attorneys, accountants, and other professionals are poring over it. What are its main provisions, and how might this coronavirus relief affect you?

The Society for Human Resource Management and other outlets have highlighted the following provisions:

Paid Family Leave From Coronavirus Relief

The law provides 12 weeks of qualifying family and medical leave at two-thirds of their salary when employees can’t work because their minor child’s school or child care service is closed due to a public health emergency.

Those on the payroll for at least 30 calendar days are eligible. Benefits are capped at $200 a day (or $10,000 total) and expire at the end of the year.

Paid Sick Leave From Coronavirus Relief

Employers have to provide 80 hours of paid-sick-leave benefits in various scenarios, including a situation in which an employee has been ordered by the government to quarantine or isolate or has been advised by a health care provider to self-quarantine. The payment is capped at $511 a day and expires at year-end.

Covered employers that are required to offer emergency FMLA or paid sick leave are eligible for refundable tax credits. Employers with fewer than 50 workers can apply for an exemption from providing paid family and medical leave and paid sick leave if it “would jeopardize the viability of the business.” According to the SHRM, “Gig-workers and other self-employed workers will be eligible for a tax credit to cover the benefits.”

A notable exemption is companies with more than 500 employees. The thinking on Capitol Hill was that such companies are capable of providing benefits without direct government help.

Part-Time Workers

They are also covered. According to the New York Times, such employees will receive the amount they typically earn in a two-week period. The self-employed — from freelance writers to Uber drivers — “should calculate their average daily self-employment income for the year, then claim the amount they take as a tax credit (they can reduce their estimated quarterly tax payments in the meantime).“

LEARN MORE: The Families First Coronavirus Response Act (H.R. 6201)

Is everyone getting a check?

There are a lot of rumors floating around about everyone getting a relief check. The government is still working on who gets a check and how much — and how to get the money to everyone who is eligible. As these proposals take a more solid form, we’ll have more details.

For now, keep in mind that the legal situation can change as quickly as the health situation, and ruling and reinterpretations of laws can change suddenly, modifying the advice in this article. We’ll be keeping an eye on authoritative sources in the coming days.

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Tax Filing Deadline Extended to July 15 Due to COVID-19

The tax filing deadline and payment deadline have been extended in response to COVID-19. Read more about how the IRS taxpayer relief efforts apply to you.

In response to COVID-19, the tax filing deadline has been extended by the IRS in efforts to help a great many individuals and businesses. They now have until July 15th to pay any federal income taxes they owe. The delay is available to individuals who owe $1 million or less and corporations that owe $10 million or less. The IRS will not charge interest or penalties for this delay.

Payment and Filing Deadlines Extended

Previously the IRS had only postponed payment, not filing, but on March 20th the Treasury announced filing would be postponed as well.

This could be an enormous boon to those who owe money. It’s never easy finding the cash to write the government a check, but it’s especially difficult now, as the coronavirus has curtailed so many activities: Many businesses and employees are seeing a drastic drop in income, and decimated stock portfolios may force some investors to sell at a loss to cover tax bills. Hopefully, in three months, taxpayers will be in a better position to pay.

Refunds, Federal & State Returns

For those who have already filed and are expecting a refund, nothing has changed; this does not mean they will have to wait any additional time for their refunds. Those expecting a refund have no reason to take advantage of the delay–it’s to their advantage to file as soon as possible.

This delays in filing and payment only affect federal returns, not state. However, some states are offering similar relief. The American Institute of CPAs has created a list of what each state is doing.

Note that this is a fast-moving story, so even if your state has nothing planned as of today, that may change by tomorrow.

Details of the Tax Filing Deadline Extended

This tax postponement plan began as an oral promise, but the IRS has started to issue more details and guidance in its e-newsletter:

The individual taxpayer relief includes all individual returns, includes self-employed individuals, and all entities other than C-corporations, such as trusts or estates.
The IRS will automatically provide this relief to taxpayers. Taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.
For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million.
This relief also includes estimated tax payments for tax year 2020 that are due on April 15, 2020.
The relief only applies to federal income tax, not to any other kind of federal tax.

Since this is a very new program, we will be closely monitoring the situation for additional official guidance.

How We Handle Tax Filing Extensions

Here at Donnelly Tax Law, we automatically, and in normal circumstances, file extensions for all our clients. This gives our clients until October 15th to file. However, please note that it does not extend the payment deadline of estimated taxes, which are usually April 15th and now extended to July 15th.

If you’re already a client of our’s and have questions, please contact our client manager or use our contact page to be in touch.

If you’re not a client of our’s but are interested in having us help you with your taxes, please schedule a consultation.

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