• 1979 ESTABLISHED
  • 72 MUNICIPAL CLIENTS
  • 30-40 SINGLE AUDITS ANNUALLY
  • 45+ NONPROFIT CLIENTS
  • 1 LOCAL OFFICE PLEASANT HILL
  • 0 LAWSUITS

COVID-19 and Taxes

Here is a broad look at some of the key provisions recently passed & FAQs about the tax deadline extension.

Has the 2020 tax filing deadline been extended?

Per IRS Notice IR-2020-58, the IRS has extended the FILING deadline.

                                   Tax Day is now July 15:

The tax balance due payment date has also been replaced with July 15th regardless of the amount you owe.  You also have until July 15th to pay your tax bill without interest or penalty.   No additional forms or extension requests are needed.

The revised due date applies to: 

  • Individuals
  • Corporations
  • Trusts
  • Estates
  • Partnerships
  • Associations

What about my estimates?

This is what your 2020 estimate schedule could look like:

                         FEDERAL                                         CALIFORNIA

Qtr 1                           due 7/15/2020                                   due 7/15/2020

Qtr 2                           due 6/15/2020                                   due 7/15/2020

Qtr 3                           due 9/15/2020                                   no 3rd quarter due

Qtr 4                           due 1/15/2021                                   due 1/15/2020

If I don’t have it together by July 15th, what happens?

Just like the old days, you or your CPA will need to request an additional extension. If you can’t pay by July 15th, you should consider a payment plan.  Keep in mind that interest and penalties will start accruing on outstanding balances starting July 16, 2020.

What about my IRA and H.SA Contributions, are they extended?

Yes, the IRS confirmed that July 15, 2020 will also be the deadline to make 2019 contributions to IRAs and health savings accounts (H.S.As).  Deadlines associated with contributions to workplace savings plans are not affected.

Should I wait to file my taxes in 2020? 

No, if you can file your return, there is no reason to wait for the deadline. In fact, if you are expecting a refund, you should file as early as possible. The sooner your return is accepted, the sooner you will receive your money. 

Will my refund be delayed because of coronavirus? 

So far, refunds are still being processed normally. If you are expecting a refund, you should file your 2019 return as soon as possible. There is no reason to wait.  Filing now will help ensure that you see your funds without any kind of delay.  The IRS website boasts that most refunds are issued within 21 days.

If you need to trace your refund, please use the IRS website “Where’s My Refund?” .

What about California returns? 

Everything for California has now been postponed until July 15, 2020. This includes:

  • All individual and business returns for 2019
  • All individual and business return tax balance due for 2019
  • All 2020 Quarter 1 and Quarter 2 estimate payments
  • All 2020 LLC Taxes and Fees

The California State Controller has stated taxpayers will continue to get their refunds timely.

What about other tax stuff ?

  • Property tax collectors state-wide have said they WILL NOT waive the property tax deadline. You might be able to apply for hardship waiver, but it’s a case by case basis. The Contra Costa Tax Collector posted a friendly reminder that secured property taxes are due no later than Friday, April 10, 2020.
  • Social Security offices are closed to the public. You may still conduct some business by phone or online.
  • If you have lost your job or can’t work because of a COVID-19, you can apply for disability insurance with the California Employment Development Department. Gov. Gavin Newsom waived the waiting period, so you can apply immediately.  Website:  www.edd.ca.gov
  • Federal student loan payments have been deferred for 60 days without penalty.
  • There is a temporary waiver of early penalty for certain withdrawals from a qualified retirement plan if made for coronavirus-related purposes. Furthermore, the distribution is taxed over three years.
  • The bill also waives the required minimum distribution rules for calendar year 2020 for certain defined contribution plans and IRAs.  Individuals are usually required to take mandatory distribution starting at age 72, but such distributions are NOT required during 2020.  This provision is effective for calendar years beginning AFTER Dec 31, 2019.

Talk to your local bank and credit card company. Some are allowing for auto loan deferments, credit card deferred payments, refund of overdraft charges and hardship programs for mortgage customers.

Fraud Alert IRS Scams

 

In October 2015 the IRS released IRS Special Edition Tax Tip 2015-18, warning taxpayers of a growing trend in scammers pretending to be tax collectors from the IRS. Criminals will call taxpayers claiming the taxpayer owes a tax bill. They demand immediate payment and often threaten arrest if you do not make payment plans immediately.

 

It is important to note that they will change their tactics and the way they present their demand to try and throw people off. However, there are some common traits to their scams to look out for.

  1. They will demand immediate payment. They don’t want to give you time to think. If you do they are concerned that you will have second thoughts and realize it is a scam.
  2. They will typically try to use the appearance of authority to intimidate you. Often, they will call claiming to be an IRS agent, even offering a badge number.
  3. They will typically use fear to their advantage. The fear of owing the IRS money is enough to get people motivated to avoid being on the wrong side of the IRS. However, scammers have stepped up their game recently claiming that a warrant will be issued to local authorities to arrest you.

 

One way to avoid being a victim is to know how the IRS operates

  1. The IRS will not call and demand an immediate payment. The IRS will send you a bill in the mail.
  2. The IRS will not force you to pay without allowing you the right to appeal the amount you owe.
  3. The IRS will not require a specific form of payment for taxes. Scams often require payment by Western Union, gift card, or credit card.
  4. The IRS will not ask you for your credit card number over the phone.
  5. The IRS will not threaten to have the police come and arrest you.

 

What you can do

  1. Don’t give out any information, hang up immediately.
  2. You can report the incident to the IRS at their “IRS Impersonation Scam Reporting” webpage. Or you can call 800-366-4484.
  3. You can report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.

 

Resources

  • If you think you do owe taxes you can contact the IRS at 800-829-1040. IRS workers can assist you concerning any taxes you may owe.
  • Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.
  • For more, visit “Tax Scams and Consumer Alerts” on IRS.gov.

 

IRS Video

Equifax Data Breach

It is still early in the investigation and new information continues to come to light, but it is clear that almost half of all Americans have been impacted by Equifax’s data breach. In light of this, it is hard not to rush impulsively to do something like click on a link to sign up for credit monitoring.  Scammers are already calling or emailing people to say they are with Equifax in order to trick people in disclosing personal information that can be used by other criminals to commit identity theft or infect their computers with malicious software.  This is another risk related to the breach that consumers need to be aware of.

 

Though it will take further time for investigators to bring to light the complete ramifications, it is evident that the impact from this breach will last for decades.

No Easy Solutions

This is a long-term problem. Identity information was stolen in the breach, including names, addresses, and Social Security Numbers (SSNs), will be usable by hackers long after the breach has been forgotten.  10-years from now individuals who had access to the content stolen in the breach could use your SSN–unless you change it.

 

Change your SSN?  If only that were easier. The government generally does not want you to change your SSN number. In order to accomplish this you have to show that you have been a victim and continue to be disadvantaged by using the old SSN.

 

Another potential solution is to place a security freeze and fraud alert on your accounts.  A security freeze alerts potential creditors not to open new accounts.  If you open a new account in the future you will need to unfreeze the account.  This will take time and may delay new loans.  This can be very difficult if you are applying for a mortgage loan.  A fraud alert puts an alert on your account to take extra steps to verify your identity before issuing new credit.

 

 

Some security & privacy professionals think Equifax should pay for credit monitoring for everyone for life.  As mentioned, this information could be used in the distant future, long after their year of free monitoring is over.   Write your congressional members and demand lifelong protection from a lifelong threat.

 

3 Things You Can Do
  1. Sign in up for your own credit monitoring service.  Optionally you can do a credit freeze or fraud alert on your account.
  2. Don’t use Equifax’s free monitoring or their website.
  3. Don’t listen to anyone who calls you about Equifax data breach.  Also, watch out for emails, scammers will use fear to get you to click on a link to take you to a malicious website.

 

To freeze your credit or start a fraud alert call the three major credit reporting agencies.

Phone numbers:
  • Equifax — 1-800-349-9960
  • Experian — 1 888 397 3742
  • TransUnion — 1-888-909-8872
More Information and Sources

These websites will cover everything you need to know. You can start with the following:
State of California Department of Justice, Information Sheet, How to “Freeze” Your Credit Files
Federal Trade Commission, Consumer Information, The Equifax Data Breach: What to Do
Consumer Financial Protection Bureau, blog, Identity theft protection following the Equifax data breach, By Kristin Dohn – SEP 09, 2017
Federal Trade Commission, IdentityTheft.gov website
Social Security Administration, Frequently Asked Questions, Can I change my Social Security number?
Federal Trade Commission, Consumer Information, Equifax isn’t calling
CNN Money, Why Millennials should be really worried about the Equifax breach, by Danielle Wiener-Bronner, 15 SEP 2017
Equifax hack: What’s the worst that can happen? If you’re not worried about the Equifax hack, you should be. by David Goldman, 11 SEP 2017

Real Estate Wealth, Inheritance Planning that Works

This seminar covers estate planning and how you can limit taxes, avoid probate, and maximize inheritance by utilizing Revocable Living Trusts, Family LLC/LLP, Spousal Limited Access Trusts, Charitable Remainder Trusts, and Irrevocable Life Insurance Trusts.

IRA Tax Planning, De-fusing the tax time bomb

This seminar covers retirement and estate planning and how you can limit taxes, avoid probate, and maximize inheritance by utilizing reverse mortgages, conduit trusts, and investments.  What should you do with your required minimum distributions?  What strategies can you use for beneficiary designations?