As the COVID-19 virus spreads rapidly, governments around the world are suggesting—and, in some cases, rigidly enforcing—social distancing measures. In this time of uncertainty, many Americans are concerned for their financial security and business owners need to leverage every opportunity to strengthen their business.
We suggest using this time to get ahead of your tax debt, put your records in order, and create a plan to strengthen your financial position in the future.
Here are 4 ways you can use social distancing time to get ahead of tax debt:
1. Gather Documents
Whether you’re undergoing an audit or reconciling your tax debt, you will need to paint a complete financial picture for the IRS. Now is the perfect time to start gathering necessary documents, from business sales records to bank statements and receipts.
If you own cryptocurrency, you will need to calculate all your gains and losses to determine your tax liability. Otherwise, the IRS may slap you with a huge, inaccurate tax bill. We highly recommend getting all your exchange data in one place. Then, you can either calculate the gains and losses yourself or simply let our experienced crypto tax attorneys go through the data and prepare your tax report.
Don’t know where to start? We can help.
2. File Your Tax Return or Extension Now
Secretary of the Treasury Steven Mnuchin announced on March 20 that the tax filing deadline has been extended to July 15, 2020.
However, we still suggest filing your return as soon as possible. We are already seeing a backlog in processing due to reduced office hours. If you are owed a refund, you’ll want to file now in order to get your check ASAP. If you owe, you can file now and defer payment until July 15 with no interest or penalties. It’s a good idea to understand how much you will owe so you can create a payment plan.
Need even more time? You can also file an extension by April 15. This way, you can file your tax return on October 15, 2020. You will still need to estimate the amount due and start making payments on July 15.
Call us at 847-281-3436 to discuss which option is right for you.
3. Develop a Payment Plan
The Treasury has given taxpayers a little extra time to pay 2019’s tax bills, but it’s still a good idea to develop your repayment plan now so you can be ready when the July 15 deadline comes.
Should you pay on July 15? Create an installment plan? Enter an IRS debt relief program? We can help you choose the best option and guide you through the entire process.
If you have outstanding tax debt from prior years, call our experienced tax attorneys right now at 847-281-3436. We’ll help you navigate repayment options, and may even be able to significantly reduce your debt.
4. Prepare for Next Year
Feeling the hit from slow business, stock market woes, or both? Start planning your 2020 tax strategy now to minimize your tax burden next year. Depending on your personal or business financial position, there are several proactive strategies you can use to minimize your future tax bill.
For example, you can claim a capital loss on cryptocurrency trades and use that to offset future gains. This is just one simple way to get ahead of your tax bill; call us to get more cost saving strategies tailored to your needs.