When the IRS extended the annual tax deadline at the beginning of the coronavirus pandemic, the new July 15 deadline may have seemed like it was a long way off. Now, in just a few short days, you will need to either file your freelance taxes or file an extension, which will give you until October 15, 2020, to file your full return and pay your tax obligation.
If you opt to file an extension, keep in mind that you should still pay as much of the tax you owe as possible by July 15. You will have to pay interest and penalties on any tax obligations you may have that are not paid by July 15.
While the extended time to pay your annual taxes may have been helpful, you may now be feeling extra financial pressure if you are tight on cash due to the impact of the pandemic. Compounding the problem is that there are several other tax payments due on July 15, including state estimated taxes and your federal estimated taxes for both the first and second quarters of 2020.
For freelancers in New York State, California, and several others, first-quarter estimated tax payments were also moved to July 15 this year, making it extra important to pay as much as you are able by this due date.
Freelancers should try to pay their taxes to the fullest extent possible by July 15 to avoid having to pay late penalties and interest. Given all of the tax obligations now due, failing to pay now can put you in a situation of being financially overwhelmed later. If you need assistance filing your taxes or managing your tax obligations, consider contacting a tax professional as soon as possible.
Jonathan Medows is a New York City-based CPA who specializes in taxes and business issues for freelancers and self-employed individuals across the country. He provides tax, accounting and business articles for freelancers on his website, http://www.cpaforfreelancers.com, which also features a blog and a comprehensive freelance tax guide. Please note: Due to the high volume of inquiries in regard to COVID-19, Jonathan is not able to respond to individual requests for information at this time.