IRS Updates, June 14


June 17 Deadline For Taxpayers Living Abroad

Taxpayers living and working abroad have an automatic two month extension to file their tax returns, which is June 17 this year. A further extension is available (for filing, not for payment), but it has to be requested. Qualified combat zone taxpayers have at least 180 days after they leave the combat zone to file their tax returns and pay any taxes due. More information can be found here.

June 17 Deadline For Estimated Tax Payments

If you are required to make quarterly estimated tax payments, the deadline for the second payment is June 17. Generally this applies those who are self-employed, have rental income, capital gains, and other income not subject to withholding. The IRS has details and payment information.

Interest Rates Decrease In Quarter 3

The IRS has announced a decrease in interest rates effective July 1, 2019. 

The rates will be: 

  • 5% for overpayments [4% in the case of a corporation];
  • 2.5% for the portion of a corporate overpayment exceeding $10,000;
  • 5% for underpayments; and
  • 7% for large corporate underpayments. 

Final Regulations On Charitable Deductions

The Treasury and the IRS have issued final regulations regarding charitable deductions and state and local tax credits. Taxpayers will have to reduce their charitable contribution deductions by the amount of any state or local tax credits they receive in return. However, in certain circumstances taxpayers may treat payments they make in exchange for these credits as state or local tax payments. This allows some taxpayers to deduct some payments as taxes.  

Final GILTI Regulations

The Treasury and the IRS have issued final regulations that provide guidance to determine the amount of global intangible low-taxed income (GILTI) included in the gross income of certain U.S. shareholders of foreign corporations.  The IRS and Treasury are also seeking comments regarding proposed regulations having to do with the treatment of domestic partnerships with respect to controlled foreign corporations owned by the partnership.

Payment Options Available

The IRS is currently issuing bills to taxpayers who filed on time but didn’t pay their taxes. There are a plethora of avenues available to send money to the IRS, including electronic options, IRS Direct Pay (from a bank account), debit or credit card, the mobile-friendly IRS2Go app, tax software that was used for filing, and Electronic Federal Tax Payment System (including the EFTPS Voice Response System). Additionally, the IRS advises taxpayers who are unable to make payments in full that there are many compromise options available to them