Articles, Taxes

Tax in a World of Pandemic

BY ORLANDO GOTAY

A name that did not even exist at the beginning of the year, COVID-19, has turned all of our lives literally upside down, in a matter of weeks. Folks, we are living in amazing times.

COVID-19 has a way to affect literally everything we do, or plan to do (I am asking South Dakota to waive a one-day “visit overnight” requirement for my driver’s license renewal, due soon). Employment, travel, supply chains –literally everything– is being affected by COVID-19.  And of course, this comes in the middle of tax season. People are losing jobs and facing incredible hardships –all have a very meaningful impact, come tax time.

As I write this, Congress is fashioning some emergency economic relief for Americans; details are unclear but suffice it to say this is a truly major calamity that requires unprecedented actions, the world over.

The IRS has moved a little (and by this, I mean not nearly enough) to cushion the blow for now. It announced a 90-day postponement of the due date for 2019 tax returns, July 15. This includes payments too. There are additional extensions available. Some extensions (if you reside abroad) are automatic (no extension request needed filing, your later returns simply noted as such). For regular stateside residents, an extension needs to be affirmatively filed on time.

States are tricky because sometimes they follow the federal rule and sometimes they don’t. For instance, some allow an automatic extension if you filed a federal one, some will require their own extension filed irrespective of federal extensions. COVID-19 throws an additional wrench. For example, California’s COVID-19 relief provides an automatic extension of time to file and pay tax until June 30. If you need to file a state tax return, make sure you note with precision the exact requirements if you are not able to file (or pay tax) by their regular due dates.=
Tax administrators are just beginning to wrap their arms about the entire set of consequences COVID-19 has on ordinary Americans, not just on patients and their loved ones. If you come up with a tax situation affected by COVID-19, I urge you to write the appropriate tax officials. They need to hear from you. I hope you will continue to be safe wherever you happen to be.

Orlando Gotay is a California licensed tax attorney (Master of Laws in Taxation) admitted to practice before the IRS, the U.S. Tax Court and other taxing agencies.  His love of things Mexican has led him to devote part of his practice to federal and state tax matters of U.S. expats in Mexico.  He can be reached at tax@orlandogotay.com Facebook: GotayTaxLawyer or WhatsApp at +17604491668. This is just a most general outline. It is informational only and not meant as legal advice.

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