How does an extra 90 days to pay taxes help Americans?
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You still have to file your taxes by Wednesday, April 15, but if you owe money to the federal government, you don’t have to pay until mid-July.
Treasury Secretary Stephen Mnuchin announced this to keep an estimated $300 billion in liquidity circulating to counteract the economic drag of COVID-19. It’s a penalty-free, interest-free delay.
George Smith, a certified public accountant with Andrews Hooper Pavlik near Detroit, explained how this will work and how it’s going to help his clients. Below is an edited transcript of his conversation with David Brancaccio.
George Smith: The due date is still a hard due date at this time, as far as we know, but there is an extension of time to pay any tax obligations.
David Brancaccio: Do you think this postponement will help any of your clients as a practical matter?
Smith: Most definitely. I think we have two categories of clients we’re going to deal with here: those who have regretfully lost their jobs due to layoffs. The obligation to pay your 2019 taxes does not go away regardless of circumstances. So, in light of that, it at least gives them a 90-day window with or without employment to perhaps come up with a game plan.
The other group that I see are recent retirees who have recognized a lot of capital gains because the market was way up in 2019. Now they’re paying taxes on those gains from a portfolio that has diminished some 30% in value. So they will be paying higher taxes with, in essence, lower-value money. I mean, again, this gives 90 days, perhaps, for the stock market to somewhat recover, too. And there’s a lot of concerns here, too.
COVID-19 Economy FAQs
What’s the latest on the extra COVID-19 unemployment benefits?
As of now, those $600-a-week payments will stop at the end of July. For many, unemployment payments have been a lifeline, but one that is about to end, if nothing changes. The debate over whether or not to extend these benefits continues among lawmakers.
With a spike in the number of COVID-19 cases, are restaurants and bars shutting back down?
The latest jobs report shows that 4.8 million Americans went back to work in June. More than 30% of those job gains were from bars and restaurants. But those industries are in trouble again. For example, because of the steep rise in COVID-19 cases in Texas, Gov. Greg Abbott, a Republican, increased restrictions on restaurant capacities and closed bars. It’s created a logistical nightmare.
Which businesses got Paycheck Protection Program loans?
The numbers are in — well, at least in part. The federal government has released the names of companies that received loans of $150,000 or more through the Paycheck Protection Program.
Some of the companies people are surprised got loans include Kanye West’s fashion line, Yeezy, TGI Fridays and P.F. Chang’s. The companies you might not recognize, particularly some smaller businesses, were able to hire back staff or partially reopen thanks to the loans.
You can find answers to more questions on unemployment benefits and COVID-19 here.
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