VIDEO: COVID-19 Tax and Business Update
On the day that would kick-off the 7 day countdown to “tax day” in most years, Steve Sachetta shares an update on this year’s unique tax situation. He also provides some important information for businesses facing financial hardship due to COVID-19 .
Good morning. Steve Sachetta coming to you from the offices of Sachetta Callahan, with some very important information regarding what’s left of tax season. And so today is our seven day countdown to normal deadline on April 15th. Unfortunately or fortunately for taxpayers, the extension deadline has gone out to July 15th. So I want to give you some very important information. This is by no means an all inclusive details of what, is going on, but some very important things for our clients and taxpayers, to bring to them this morning with only seven days left to our traditional tax season. As everyone should have heard by now, if not, I’ll let you know, the deadline has been expend extended to July 15th, 2020. That means you do not have to file your tax returns until then. You do not have to make your payments until then for both federal IRS payment as well as the state with the Commonwealth of Mass.
There is a further extension on the July 15th deadline. We believe that’s going to still be the October 15th deadline, but they haven’t exactly told us that yet. The CARES Act, which is the law that was passed to provide economic stimulus to the taxpayers of the United States as well as some economic disaster relief for businesses. The first thing I want to let you know is we have met our office here is still open. I come here every day. I’ve been coming here every day since January 1st we have a limited staff here. There are about six or eight of us that show up stay inside of our, our square four walls. I box, I like to call solitary confinement here. The building is under lockdown. We cannot see clients, uh, other than by video conference. Our telephone meetings, we’ve been doing that every hour on the hour with people until things are coming to a close here during the final week.
We are here to support you. We were planning to take vacation time that we normally do every April 15th, close the office a few days and then come back in light of what’s going on. We have decided not to do that. I may be taking a day off, but they will be staff here manning the offices every day. Um, first important item that I like to mention is those people that did come in have met with us late January, early during all of February and early March. Your tax returns had been filed electronically through the regular, electronic federal system, federal and state system that we have. We should have asked, you would have asked you late in March or mid-March, whether or not you wanted to use the April 15th deadline or the extended deadline through July 15th.
Those returns that went out early in the tax season, we have no way of retracting your electronic filing once it goes to the government authorities. There is now some mechanism that they’ve put in place for the federal government. If you have a federal balance due, you can cancel your April 15 balance by calling this number. So you cancel your April 15th balance due. It’s with a US treasury financial agent by calling one 808 +1 888-353-4537. The required information you need is one, the primary social security number, meaning the first person listed their social security number on your tax return, your bank routing, transit number. And lastly your federal balance due amount. The dollar amount should be in whole dollars. No cents. Again, the number is 1883534537 you would need to call and it’s an automated system. You put in those three items, you should be able to cancel the April 15th balance and it will then be up to you to either go online, irs.gov and schedule the July 15th payment or you can call our office and we can produce a paper voucher for you to mail a check into the government.
So that’s the first important item. Secondly, we’ve been getting a lot of questions regarding estimated tax payments. As you may know, if you pay the estimated tax payments in the past, you are first estimate is normally due April 15th. Second one is due June 15th, the April 15th payment federal and state. Again, have been postponed to July 15th. We have no information at this date about the June 15th payment, but that’s a couple of months away and this law is changing. Things are, are moving and being interpreted different ways at every day that we come to work. Another item of importance is some people have asked about payment agreements. Both the IRS and the Commonwealth of Mass have payment agreements available. If you’re finding yourself in financial financially difficult times, you can get a payment agreement with either the federal government or the Commonwealth of Mass. We don’t recommend that only because they charge you a filing fee at the federal level and both federal and state will charge you penalties and interest on the balances that you have due. In my opinion, if you want to pay them on payments, um, stop paying in April, pay them in in May and June and then July 15th.
If that’s your final payment, you would be then paid in full. It’s better not to borrow from the IRS because you’re going to pay the fees, the penalties and the interest. Another item of interest is the refunds on, I should not call them refunds. Everyone is expecting to get a an economic impact payment and it’s going to be based on your either your 2018 tax return on 2019 return. If it has been filed, we don’t know the cutoff date that they’re using, but anyone who has filed through the electronic filing system with us, our clients, normally that gets accepted in 24 to 48 hours. And you get your normal refunds in 21 days. So the processing should be up to date, but we’re not, we don’t have a deadline date. They’re expecting to make direct deposit of these economic impact payments into your account that you gave us to use for electronic filing, direct deposit or direct debit.
There’s a lot of details as to who’s going to get what payment. I’m not going to go into that right now. But there are new, there is new information that says payments will be sent direct deposited and for security purposes, the IRS plans to mail a letter about the input in economic impact payment to the taxpayer’s last known address. Meaning if we did your return, it’s the address we had on the, on the tax return within 15 days after the payment has been paid. That way it will inform you where they sent it to, they’ll probably give you the last four digits of your account number and how much you was supposed to get did receive that will give you some insight as to whether or not you are unsure if you’ve got an economic impact payment direct deposit to you.
Last but not least, there’s a very huge amount of information included in this tax act that they passed. Congress passed. We are, have been working with our clients, with local bankers, with SBA lenders and with the IRS to try to decipher all of the parameters of the loan programs. And it is very detailed, changing on a daily basis. Some of the banks are calling us to interpret what we think our, um, interpretation of the law is and how we are handling. We have been preparing less tax returns for clients the past few weeks and more stimulus loan payments. There is various programs. One, if you have greater than 500 employees, I’m not going to get into that right now. Most of our clients are small business and have fewer than 500. There’s then the Paycheck Protection Program. It’s a loan with forgivable features.
We are planning today to send out an email to our business clients with some of the details and elaborating on what’s included, what’s not included, what our interpretations are. Then lastly, there is a SBA economic injury disaster advance. We’ve been telling people it’s a $10,000 advance, sort of like a bridge to get to this PPP loan. We just found out yesterday that that is based on the number of employees. So, we’ve been telling people it’s a $10,000 advance and that everyone is eligible. It appears that it’s based on number of employees. So 10 or more employees, $1,000 a piece would get the $10,000, but if you have one employee, two employees, you’re going to get $1,000 or $2,000. Unfortunately, we did not know that upfront. We filed literally, I don’t know, probably 50 or 60 of these applications in some people will probably be somewhat disappointed that they’re not getting the full $10,000.
So those are the important messages I wanted to send today, we’ll be sending out, like I said, follow up emails. We are here every day. We plan to be working right up until the April 15th deadline and the office will remain open after that. Regular hours, probably not late nights, Saturdays, Sundays, holidays as we have the past three and a half months. So I thank you very much for listening and I hope everyone is gonna stay safe. Those of you that have been, uh, struck with the coronavirus, I send my positive thoughts and my love to all of you. Thank you very much from Sachetta and Callahan Goodbye.