As you know, in response to COVID-19, Illinois extended the filing deadline and payment due date of the 2019 individual tax return to July 15, 2020. And as you may remember, the state did not extend the due dates for making 2020 estimated tax payments. Therefore, the due date for all 2020 estimated tax payments remain the same with the 2nd quarter due date of June 15, 2020 quickly approaching.
The good news is that Illinois has made some concessions to allow individuals to make estimated tax payments based off your last completed return (which could be your 2018 Illinois return). This means you can avoid stiff Illinois underpayment penalties by paying 100% of your 2018 tax over four equal installments during 2020.
This seemingly simple approach makes for a nice default solution. However, depending on your 2019 and 2020 income, this could leave you with either a heavy overpayment or liability with Illinois come filing time in 2021. We recommend speaking with your tax advisor to determine the best option for you and your specific circumstance.
JULY 15, 2020 IS RIGHT AROUND THE CORNER
The July 15 filing and payment deadline will be here before you know it. And remember, this includes the filing and payment due dates for many 2019 tax returns as well as 1st and 2nd quarter 2020 estimates. Because of this, we anticipate taxpayers having a cash flow issue with significant taxes due in a short period of time.
Cray Kaiser is here for you as you navigate the complexities of 2019 and 2020 taxes amidst the backdrop of COVID-19. Please contact us today If you have not yet completed your 2019 tax return and must make 2020 estimated tax payments. We can provide you with an estimate of your tax cash flow needs during the next few months.