15th April 2020
The Coronavirus (COVID-19) has presented many unique challenges to us all. The health and safety of family and friends is top of mind for many. Market volatility has also created an environment of financial uncertainty. In these turbulent times, there are some key developments and steps you can take to help bring some peace of mind. MSI's Utah law member Michael Best & Friedrich LLP explains further.
Extension of time to pay 2019 taxes and first quarter estimated taxes
On March 18, 2020, the U.S. Treasury Department issued Notice 2020-17 that made several important announcements regarding tax payments and filings due on April 15, 2020. The Notice provides for an automatic 90-day extension for payment of 2019 tax due and first quarter 2020 estimated taxes, so taxes normally due on April 15, 2020 must now be paid no later than July 15, 2020. For taxpayers who owe less than $1,000,000 combined tax on April 15, no interest and penalties will be assessed on the tax payments deferred until July 15. The extension of payment time applies to individuals and trusts, but does not apply for any taxes due on gift tax returns or estate tax returns that are due prior to April 15, 2020.
There is no automatic extension of time to file returns, so taxpayers should still file their tax returns, or request an extension, by the April 15 filing deadline. The extension of time to pay does not apply to second quarter 2020 estimated taxes due on June 15, 2020. Some states are also extending their filing deadlines, but Wisconsin, Colorado, Utah, and Illinois have yet to announce any deadline extensions.
Review of estate planning documents and beneficiary designations
We know that estate planning might not be top of mind for you right now. As you consider your financial picture during these turbulent times, an up-to-date estate plan is part of creating financial security for you and your family. We encourage you to review the status of your estate planning documents, including any existing Wills, trusts, and financial and health care powers of attorney, and to consider whether the titling of your assets and your beneficiary designations are up to date and coordinated with your overall estate plan. We would also like to remind you that children over the age of 18 should have financial and health care powers of attorney.
Consider the impact of down markets and low interest rates
For those looking to minimize estate taxes, the current environment of depressed market values, low interest rates, and high federal estate tax exemption amounts creates opportunities to maximize tax planning. Here are some planning considerations:
As the coronavirus (COVID-19) continues to disrupt daily life, it’s clear this outbreak will impact all of us across borders and industries. During this unprecedented global health crisis, Michael Best has formed a COVID-19 Task Force to advise clients on business and legal implications related to the coronavirus.
Michael Best is a leading law firm providing a full range of legal services. We have earned many loyal clients by understanding each one’s unique goals, opportunities, and challenges and by delivering results, year after year. Our focus is on your entire organization, not just on the legal matters we are involved in.
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