Reminder: July Set as New 2020 Federal Tax Return Deadline
With many companies and organizations scrambling to keep their operations afloat during the pandemic, the Internal Revenue Service (IRS) postponed the tax return deadline until July 15. Likewise, the IRS also announced the same date as the extension deadline for 2019 HSA contributions. Here’s what you need to know.
Why Was a Change Made?
As the coronavirus pandemic broke out across the United States, the IRS extended the federal tax deadline, giving businesses and individuals more time to focus on bracing for COVID-19.
The change, which was announced on March 23, 2020, followed President Trump’s emergency declaration in reaction to spiking COVID-19 cases in New York City, Seattle, and other major coastal metropolises. Since then, the coronavirus has spread to all 50 American states, wreaking havoc on local, state, and national economies, resulting in a historic unemployment rate—and a death toll well over 100,000.
Tax Return Deadline Extension
In response to widespread devastation, one of the many actions taken by the federal government was to delay the tax return deadline. The new due date is now July 15, 2020.
With that in mind, individuals seeking even more time to file their returns can do so by requesting an extension using Form 4868; businesses that need to postpone returns must file Form 7004. The same July 15 deadline also applies to U.S. citizens living abroad.
HSA Contributions Also Extended
In May 2020, the IRS released the new HSA limits for 2021, which include contribution increases of $50 and $100 for single and family coverage, respectively.
The announcement also noted an extension on health savings account contributions for 2019, which coincides with the new July 15 tax return deadline.
For taxpayers, this means more opportunities to utilize tax savings when preparing for healthcare costs—a particular necessity given the uncertainty from the present pandemic. For employers, the extension offers an excellent opportunity to remind employees about the benefits that HSAs offer to workers—including investing their balance, which can be a very effective way to maximize benefits.
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