HANNIBAL | As the July 15 tax deadline approaches, some Missouri taxpayers are waiting until the last minute to file their 2019 taxes due to a variety of factors.
Earlier this year, the U.S. Department of Treasury and the Missouri Department of Revenue pushed back the tax deadline from April 15 to July 15 because of the coronavirus pandemic.
Donovan's Tax Service owner Minnie Donovan said some people have procrastinated because they think there will be another extension. So far, neither the federal or state government have issued an extension past July 15.
“They're not afraid of the coronavirus here in Hannibal,” Donovan said. “It's just the typical procrastination. They procrastinate on April 15 and now they are going to procrastinate on July 15, that's what it boils down to.”
LS Tax Service owner Lindell Shumake has seen an increase in clients at his business in the past couple of weeks as the deadline approached. Shumake also indicated that procrastination was one of the reasons why some taxpayers waited to the last minute.
“I haven't met anybody that said they waited specifically because of (COVID-19),” Shumake said. “Ordinarily, the ones that we get toward the end of the income tax season are the ones that owe or expect to owe money. A lot of times people expect to owe and then their returns are more complicated because they are self-employed.”
Those who owe the state or federal government money have the option of making quarterly payments or they can pay it all in one lump sum.
Shumake said that he has seen clients apply for an exemption to avoid tax penalties and interest, but advises his clients to pay their tax bill before penalties and interest are accessed.
“If someone has a bunch of penalties and interest that occurred, they can fill out a (one-time exemption) form and just request that it be abated,” Shumake said. “They may do it once for someone … and (from what I hear) they are going to be more lenient this year.”
Taxpayers can apply for an abatement from the IRS to pay their 2019 federal taxes at a later date if there is a valid reason, such as economic struggles due to COVID-19.
Shumake said he has had a few customers request an extension until October.
“Normally under the regular rules, one can get a six-month extension just for asking,” Shumake said. “I've had requests over the weekend on someone who needs more time to get the regular extension until October and asked me to file it for him, which I can do electronically if I have the customer already.”
Some businesses and taxpayers have waited close to the July 15 deadline because of the economic slowdown.
Donovan said the economic fallout due to the COVID-19 pandemic has affected the cash flow of 50% of the business clients for whom she does tax work.
“It's hurt the small businesses,” Donovan said. “Big businesses can (deal with it), but the small businesses in the area are having a real problem and there's nothing you can do about it. It will put a lot of these small businesses out of business, which is real unfortunate.”
The tax deadline for the state of Missouri is also on July 15, although tax bills are usually not nearly as high as federal income taxes.
Shumake said the state government can assess penalties and interest the same way the federal government does.
“If it's a substantial amount, then they should have paid quarterly (payments),” Shumake said. “They can do that. The state has been kind of slow paying refunds. I used to be a state representative and I think the revenue has been kind of slow coming in and that's the reason why.”