At this writing (5/15/2020) we are 8 weeks or more (I forget) into the coronavirus shutdown. I am in California, and we have no idea how long it will be shut down, they are saying anywhere from 3 months to 1 year.
No matter what you do, FILE YOUR FEDERAL AND STATE TAXES ON TIME.
WHY?
- The IRS has about 2,000 fines and penalties (At least it seems like it). One penalty is failure to file your taxes on time. Even if you cannot pay your taxes on time (failure to pay is another penalty), file your taxes ON TIME and save yourself an expensive penalty.
- If the economy is shut down long enough and drives you to the bottom, someday you might consider bankruptcy and you owe IRS a big amount, there are some cases where it is dischargeable in bankruptcy. One issue you need to discharge taxes, did you file your taxes on time.
- In California, if you fail to file your taxes on time, you might not be able to discharge your taxes. I had one client who owed back taxes over a series of years. For one year he owed over $20,000.00, but we couldn’t discharge it, because after reviewing his transcripts he had filed over 2 months late, and he did not have a reasonable excuse. Plus he had to pay a penalty for failure to file!
- Filing your taxes on time will save you a penalty now, and may be a benefit in the future if you are seeking relief from debt.
