Thursday, May 13, 2021
July 15 -- wait or file now?
Because the COVID-19 pandemic has shut down so many businesses, the IRS postponed the filing and payment dates for returns and payments due April 15, 2020.
But should you wait the extra three months to file? Maybe not.
First, if you expect a refund, file now if you can and get it sooner.
Also, if you get a refund direct-deposited, IRS will use that bank info to direct deposit the Economic Stimulus Payment. Otherwise, a check will be mailed, but that may take a few months to arrive.
IRS will use direct deposit information from 2019 returns if they have been filed. If not, they will pull from your 2018 return. If you have changed banks since filing your 2018 return, you will want to file your 2019 return quickly so IRS has your current bank information.
What if you owe?
There's still a good reason to file earlier: beat scammers from filing a fraudulent return in your name and nabbing a refund -- and possibly your Economic Stimulus Payment.
Just because you file now doesn't mean you have to pay now. You will still have until July 15 to pay IRS and Arizona without penalty.
If you are considering contributing to an Individual Retirement Account (IRA) or Self-Employed Retirement Plan (SEP), you have until July 15 to make your contribution. The contribution does not have to be made before you file. If you're going to get a refund, filing now will give you cash from the refund that you can use to fund your IRA.
Contributions to charities and schools for the Arizona "dollar-for-dollar" credits still have to be made by Apr. 15.
If you need more time beyond July 15 to pull together your personal tax return, an extension can be filed up to July 15. The extension will move the filing date to Oct. 15, but any balance due still needs to be paid by July 15.
Where's my refund?
Click here to get an instant answer from the IRS. You'll need the exact dollar amount of your refund, Social Security number and filing status.
For Arizona refunds, visit Check Refund Status.
Foreign asset reports due June 30
Anyone who had a bank or financial account located outside the United States with a $10,000 balance last year needs to file an FBAR by June 30.
FBAR refers to Report of Foreign Bank and Financial Accounts, which must be filed with the Financial Crimes Enforcement Network (FinCEN). It is not a tax form and cannot be filed with the IRS. The form must be filed electronically. You must file this report yourself; we cannot file this report for you.
In general, the filing requirement applies to anyone who had an interest in, or signature or other authority over foreign financial accounts whose aggregate value exceeded $10,000 at any time during last year.
The FBAR requirement is separate from the requirement to report specified foreign financial assets on Form 8938 with a U.S. income tax return. A brief comparison of the two filing requirements is available on IRS.gov.
Does an LLC or LLP make sense for you?
The new business structures, limited liability companies and limited liability partnerships, offer streamlined alternatives to S-corporations. Davis Tax Services can help you choose the best structure for your new business, form your company, get established with the tax authorities and plan your financial recordkeeping.